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MoF: Submission requesting for extension of timeline for filing Form 1 relating to Equalisation Levy due to technical issues
MoF: Submission requesting for extension of timeline for filing Form 1 relating to Equalisation Levy due to technical issues

July 26, 2021

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Equalisation Levy (EL) was first introduced in India vide Finance Act (FA) 2016 which requires specified person making payment to non-residents (NR) for online advertisement and related services, to deduct EL at 6% of gross consideration (6% EL). FA 2020 expanded the scope of EL to levy tax @ 2% on consideration received/receivable by NR e-commerce operators for e-commerce supply of goods or services made to resident persons (2% EL).

The Central Board of Direct Taxes (CBDT) notified Equalisation Levy Rules, 2016 (EL rules), which requires furnishing of annual statement in Form 1 in respect of all specified services chargeable to EL during any financial year before 30th June of the following financial year.

Due to catastrophic second wave of COVID-19, the CBDT, vide issue of Press Release dated June 25, 2021, extended the time limit for furnishing annual statement in Form 1 by one month to July 31.

However, based on feedback from Industry, we understand that taxpayers are facing issues in accessing the income tax portal for filing Form 1. Some members are getting “Access denied” message at the time of login while others are not able to access Form 1. As a result, the Industry has not been to file Form 1 till now due to these technical glitches.

In this regard, we have made a submission to Ministry of Finance on July 26, 2021 requesting them to grant similar extensions in filing Form 1 in relation to EL for financial year 2020-21 by one month (i.e., till August 31, 2021). This will provide respite and clarity to the taxpayers in these challenging times.

We hope you will find the update useful. We will keep you posted on further developments in this regard.


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