Digital Economy: Equalisation Levy

In this era of technology intertwined lifestyle, e-commerce has become a way of life. E-commerce seemingly facilitates every other aspect of our lives at a click of a button, whether its procurement of daily household items or requisitioning of any particular service. Today, accessibility to the digital world is not a privilege but a necessity for most people, particularly in urban areas.

Over the past few decades, the burgeoning development of the Information and communication technology ('ICT'), its accessibility and affordability has led to this digital revolution around the world. ICT has also provided opportunity to businesses to tap the world markets and bridge the requirement of physical presence across the globe.

The model of doing business electronically has provided immense growth opportunities.Digital economy across the world is reflecting a growth rate of 10%¹ which is significantly higher than the growth numbers of the global economy as a whole. Research and studies around the world have indicated that investment in ICT positively affects the productivity and GDP growth of a country. Developed countries in terms of ICT development have the highest GDP levels, which indicates that implementation of ICT in a country improves its overall economic health.

Lower tax rate of DTAA would apply even if assessee omitted to fill up schedule of ‘Special Income’ in ITR

Facts

a)  Assessee, a company incorporated in Cyprus, received interest in respect of investment made in debentures of an Indian Company.

b)  The said interest income was offered to tax at the rate of 10% purportedly in line with the provisions of Article 11(2) of the India-Cyprus Double Taxation Avoidance Agreement (DTAA).

c)  Assessing Officer taxed interest income at normal rate of 43.23 % on ground that assessee did not fill up the 'Special Income' (SI) schedule in the return of income.

d)  Aggrieved assessee filed the instant appeal before the tribunal.