Critical Areas of Response to the Imposition ofEqualisation Levy on E-Commerce Operators UnderFinance Act, 2020

India, with over half a billion internet users, is witnessing remarkable digital growth, poised to revolutionize various sectors of its economy. This transformation is expected to generate substantial economic value. The digital sector, including e-commerce, is experiencing rapid expansion, contributing significantly to GDP. However, the introduction of an expanded 2% equalization levy on e-commerce businesses by India has raised concerns. This levy, broader than similar measures in other countries, taxes revenue based on the number of users, deviating from international BEPS recommendations. The imposition without industry consultation and amid the COVID-19 crisis has generated challenges for businesses. Therefore, The Dialogue recommends a reconsideration of the levy’s expansion, advocating for deferral and thorough discussions before implementation. These concerns are formally detailed in our submission to the government.