KERALA FLOOD CESS
This query is : Resolved
28 January 2021
IS KFC APPLICABLE ON B2C SALES THROUGH ECOMMERCE OPERATOR?
09 July 2024
I believe you're referring to the Equalization Levy (EQL), often referred to colloquially as "KFC" (which stands for "Krishi Kalyan Cess"). The Equalization Levy is indeed applicable on specified B2B transactions carried out through digital platforms. However, as of my last update, it typically does not apply to B2C transactions through eCommerce operators.
Here’s a breakdown of how it generally works:
1. **Equalization Levy (EQL):**
- EQL is a tax imposed on specified services provided by non-resident digital service providers to residents in India.
- It applies to specified digital services such as online advertising, provision for digital advertising space, etc., provided to Indian residents or businesses.
- The current rate of EQL is 2% on the gross consideration received or receivable by the non-resident service provider.
- EQL is applicable on B2B transactions where the service recipient is a resident of India.
2. **B2C Transactions:**
- For B2C transactions (Business to Consumer), where the end consumer is an individual or a non-business entity, EQL generally does not apply.
- The focus of EQL is on transactions involving business entities (B2B) and digital services provided by non-residents to them.
3. **eCommerce Operators:**
- eCommerce operators that facilitate transactions between sellers and consumers typically do not attract EQL on B2C sales.
- Instead, EQL is levied on certain digital services provided by non-resident service providers to businesses or residents in India.
Therefore, if you are engaged in B2C sales through an eCommerce platform, you generally do not need to worry about EQL. However, it's always advisable to consult with a tax advisor or legal expert who can provide advice tailored to your specific situation and any recent changes in tax laws or regulations.
Here’s a breakdown of how it generally works:
1. **Equalization Levy (EQL):**
- EQL is a tax imposed on specified services provided by non-resident digital service providers to residents in India.
- It applies to specified digital services such as online advertising, provision for digital advertising space, etc., provided to Indian residents or businesses.
- The current rate of EQL is 2% on the gross consideration received or receivable by the non-resident service provider.
- EQL is applicable on B2B transactions where the service recipient is a resident of India.
2. **B2C Transactions:**
- For B2C transactions (Business to Consumer), where the end consumer is an individual or a non-business entity, EQL generally does not apply.
- The focus of EQL is on transactions involving business entities (B2B) and digital services provided by non-residents to them.
3. **eCommerce Operators:**
- eCommerce operators that facilitate transactions between sellers and consumers typically do not attract EQL on B2C sales.
- Instead, EQL is levied on certain digital services provided by non-resident service providers to businesses or residents in India.
Therefore, if you are engaged in B2C sales through an eCommerce platform, you generally do not need to worry about EQL. However, it's always advisable to consult with a tax advisor or legal expert who can provide advice tailored to your specific situation and any recent changes in tax laws or regulations.
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