Jammu & Kashmir may now attract tax on Facebook, Google: Report

An equalisation levy may now be applicable in Jammu & Kashmir after the central government abrogated Article 370 on August 5. As per a report by Business Standard, industry experts believe the tax may be applicable to the region but only after specific amendments are made.

Equalisation levy is a form of direct tax levied on digital advertising on operators like Facebook, Google, Amazon and Flipkart. It was first introduced in the Finance Bill 2016 to bring e-commerce platforms within the ambit of the tax system.

It has been applicable across India at the rate of 6 percent with exception to the previous state of J&K.

“Foreign e-commerce operators who pay the equalisation levy at 6 per cent, do not have to be pay such levy on their advertisements in J&K. This may change. However, specific amendments to the provisions will have to be made to make it effective,” said Indruj Rai, tax partner at Khaitan & Co, to the daily.

Apart from the equalisation tax, the Income Tax Act is expected to remain same for J&K as the IT Act of 1961 was applicable across India including J&K.