- SEP covers the below-mentioned transactions
- E-com transaction,
- E-books, music, video streaming,
- Online app/software purchase,
- Online Gaming Service
- Troubleshooting service
- Subscription service
- The Threshold limit recently provided by CBDT for SEP Tax is
- Aggregate payment for transactions with a person in India exceeds INR 2 crore in a year
- NR interacts with 3.00 lacs or more users in India
- Now let’s understand the implication of SEP tax. Currently, DTAA does not cover SEP tax, it only covers tax on physical presence
- Even BEPS action plan left individual Countries to determine digital tax, so MLI does not cover SEP tax
- As a result, until MLI gets upgraded, even if the SEP tax is levied under domestic law, Treaty will safeguard Non-Resident business
- In other words, SEP tax shall only apply to non-resident businesses from countries where India does not have DTAA
- We also are aware of fact that Sec 10(50) exempt SEP tax if Equalisation Levy is charged on transactions
- Since India has already expanded the scope of EL and EL being independent statutes, it has a greater impact on the Digital Economy
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E-COMMERCE EQUALISATION LEVY – IS DIGITAL SERVICE BECOMING COSTLIER WITH NEW EQUALISATION LEVY NORMS
