Equalisation Levy a Concern for Digital Transactions in Auto Sector

By OEM Update Editorial August 12, 2021 7:41 pm IST

Society of Indian Automobile Manufacturers (SIAM) has stressed the need to clarify the scope of the 2 percent Equalisation Levy.

Equalisation Levy is intended to impose a tax on payments made to foreign beneficiaries for digital services provided. However, the amendments proposed under the Finance Bill 2021 may inadvertently introduce interpretation issues to cover many overseas manufacturing companies having subsidiary manufacturing entities in India, particularly in the Automotive sector, under foreign collaborations or Licencing arrangements.