new delhi foreignowned ecommerce players will have to pay equalisation levy from the next fiscal the levy which hitherto was applicable only to digital advertising players such as google has now been expanded by way of a sweeping amendment to cover all sorts of digital ecommerce transactions into india as well as those transactions which use indian datarakesh jariwala tax partner technology media entertainment and telecom practice ey said this could potentially cover all digital business earning more than rs 2 crore of revenues from india or using indian data to tax them at 2 ecommerce operator will not have recourse to favourable tax treaty provisions unlike the earlier levy on advertising now the foreign ecommerce operator will be required to make compliances in india which could also raise potential challengesthe finance bill 2020 or money bill was passed in the parliament on march 23 in a surprising development the scope of equalisation levy has been extended to cover ecommerce supply or services including facilitation from april 1 2020one can also expect legal challenges on extraterritoriality as the provisions seeks to cover nonresident to nonresident transactions which use india data where oecd is still developing consensus on taxable nexus and allocation of taxing rights he addedthe applicable tax rate is 2 plus a surcharge on amount of consideration receivedreceivable by an ecommerce operatorunlike equalisation levy in case of advertisement and related services compliance obligation in this case is on the ecommerce operator nonresident and is required to deposit equalisation levy so collected on a quarterly basis and also file an annual return the provisions relating to income on which equalisation levy has been paid being exempt from income tax it continue to apply to ecommerce supplies on which equalisation levy has been paid unless ecommerce operator has a pe permanent establishment in india and services so supplied are effectively connected to such pe