1. Paper on Equalisation Levy - Preliminaries
     

By
 

CA Rashmin Chandulal Sanghvi
 

Date: 12th July 2016
 

I.1 This paper is divided into following parts:
 

Sr. No.
 

Topics Covered
 

Page Nos.
 

I.
 

Preliminary: Contents, Short Forms.
 

2
 

II.
 

Executive Summary & Background.
 

4 � 7
 

III.
 

The Equalisation Levy � in simple words for the businessman & the tax advisor.
 

For the Experts & Critics: IV to VIII.
 

8 � 17
 

IV.
 

Pictorial Presentation.
 

18 � 33
 

V.
 

Tax Burden & Other Issues.
 

34 � 43
 

VI.
 

OECD Parameters.
 

44 � 48
 

VII.
 

Queries & Criticisms of the Law.
 

49 � 60
 

VIII.
 

Annexures.
 

61 - 68
 

I.2 Notes:
 

(i) All the views expressed in this paper are my personal academic views. E-commerce Committee and Government of India may or may not agree with these views.
 

(ii) This paper discusses concepts and interpretations. Emphasis is on: �Why this tax?�. Analysing a concept needs more elaboration than interpreting a section.
 

(iii) I have received several queries & criticisms on Equalisation Levy. I have tried to deal with almost all queries & criticisms. Hence the paper has several parts & is long.
 

(iv) Some of the issues have several aspects. In some cases, these aspects have been discussed in this paper at several places.
 

I.3 Short Forms:
 

For the sake of brevity, I have developed some short forms & used in this paper. These are marked (*). Kindly see them below.
 

BEPS : Base Erosion & Profit Shifting
 

COM : Country of Market
 

COR : Country of Residence
 

COS : Country of Source/Payment
 

*DTA : Double Tax Avoidance Agreement
 

*EL : Equalisation Levy
 

* EL TDS : Deduction of EL at Source
 

FTS : Fees for Technical Services
 

G20 : Group of 20 nations formed in the aftermath of US & Europe - Economic crises that started in the year 2008.
 

*IR : Indian Resident
 

*IRP : Indian Resident Payer
 

ITA : Income-tax Act of India.
 

NR : Non-Resident
 

OECD : Organisation for Economic Co-operation & Development
 

PE : Permanent Establishment
 

*R : Resident
 

RBI : Reserve Bank of India
 

SEP : Significant Economic presence.
 

TDS : Tax Deduction at Source (Income-tax)
 

TFDE : Task Force on Digital Economy
 

I.4 Relevant Publications:
 

BEPS ACTION ONE Report available on:
 

https://www.oecd-ilibrary.org/docserver/download/2315281e.pdf?expires=1464593118&id=id&accname=guest&checksum=E0224828F776C11A74DAA93C7FE69179
 

Indian E-Commerce Committee Report dated March 21, 2016 available on:
 

https://rashminsanghvi.com/downloads/taxation/international-taxation/E-Commerce_Committee_Report_proposing_Equalization_Levy.htm
 

I.5 Some Philosophy:
 

5.1 Truth:
 

Even if you are in the minority of one,
 

The truth is The Truth.
 

5.2 Truth must be told:
 

Publicly � Let all who care, listen.
 

Clearly � Let all who want, understand it.
 

Humbly � That is the way of decent people.
 

In substance � Core truth must be told without any hesitation & ambiguity.
 

5.3 A person in search of Truth will get Truth. A person who is not in search of truth will get anything but Truth.