Section 165A(1)

Section 165A(1) — the law in short

What the courts have decided on section 165A(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Statutory position — s.165A of the Finance Act, 2016: the two per cent levy on e-commerce supply or services, the two crore threshold, the specified circumstances, and the 1 August 2024 cut-off CBDT Circulars & InstructionsCuts both ways
  A foreign platform sold to Indian customers. Was it liable to the two per cent equalisation levy on its own receipts, what was the threshold, and when did that levy end?
  The two per cent levy is charged by section 165A of the Finance Act, 2016 — again, not by the Income-tax Act. It was inserted with effect from 1 April 2020 and charges two per cent of the consideration received or receivable by a NON-RESIDENT e-commerce operator from e-commerce supply or services made or provided or facilitated by it to a person resident in India, to a non-resident in the 'specified circumstances', or to a person who buys using an internet protocol address located in India. It is not charged where the operator has an Indian permanent establishment with which the supply is effectively connected, where the six per cent levy under section 165 is leviable, or where the operator's sales, turnover or gross receipts from e-commerce supply or services are less than TWO CRORE RUPEES during the previous year. Sub-section (4) ends the charge: it does not apply to consideration received or receivable on or after 1 AUGUST 2024.
• Statutory position — s.166A of the Finance Act, 2016: the two per cent levy is paid by the e-commerce operator itself, quarterly, and is not deducted at source — with the 31 March quirk in the fourth quarter CBDT Circulars & InstructionsCuts both ways
  Who actually pays the two per cent equalisation levy, and by when? My client is being told the Indian customer should have withheld it.
  It is paid by the non-resident e-commerce operator itself, not withheld by the Indian customer. Section 166A of the Finance Act, 2016 — again, a Finance Act provision and not an Income-tax Act one — requires 'every e-commerce operator' to pay the levy referred to in section 165A(1) to the credit of the Central Government quarterly: by 7 July for the quarter ending 30 June, 7 October for the quarter ending 30 September, 7 January for the quarter ending 31 December, and by 31 MARCH for the quarter ending 31 March. That is the structural opposite of the six per cent levy on specified services, which section 166 makes the Indian payer deduct and pay over, and it is why the Income-tax Act's disallowance in section 40(a)(ib) is written for the six per cent levy and not for this one.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.