FM clarifies on equalisation levy as LS passes Finance Bill

New Delhi, March 23 (SocialNews.XYZ) Finance Minister Nirmala Sitharaman on Tuesday clarified that the equalisation levy will not be applicable on foreign companies who pay income tax in India.

The Lok Sabha on Tuesday passed the Finance Bill, 2021, with Sitharaman introducing fresh amendments.

She said that equalisation levy has been imposed to provide a level playing field between Indian businesses who pay tax in India and foreign e-commerce companies who do business in India but do not pay any income tax here.

"We are only trying, through the equalisation levy, to treat everybody who is operating in India equally. If the foreign ecommerce companies pay income tax here, then the equalisation levy is not applicable on them. Hence there is no extra burden on any company," she added.

Sitharaman said that she intended to clarify through the amendment that equalisation the levy would not be applicable on consideration for goods which are owned by Indian residents.

Through the Bill, the government introduced another amendement fixing a ceiling of Rs 5 lakh per annum in those cases where there is no contribution towards provident fund (PF) by the employer.

Presenting the Budget 2021-22, Sitharaman had earlier proposed to restrict tax exemption for the interest income earned on the employees' contribution to various provident funds to the annual contribution of Rs 2.5 lakh. This restriction was made applicable for the contribution made on or after April 1, 2021 to rationalise tax exemption for the income earned by high-income employees.

During her reply on the Union Budget FY22 in the Lok Sabha on Tuesday, the Finance Minister also said she was ready to discuss bringing petrol and diesel under GST in the next council meet.

Source: IANS