<h1>India Proposes Equalization Levy on Non-Resident Digital Enterprises to Ensure Fair Taxation in E-Commerce Sector.</h1> The Committee on Taxation of E-Commerce recommends implementing an Equalization Levy on digital transactions involving non-resident enterprises to address tax challenges posed by the digital economy. This levy aims to ensure tax neutrality between foreign digital enterprises and domestic businesses, which are subject to income tax in India. The Equalization Levy would apply to specified digital services and transactions, with a proposed rate between 6-8% on gross payments. The levy would be separate from income tax, thus not covered by tax treaties, and would be imposed under the Finance Act. The Committee suggests restricting the levy to business-to-business transactions, with a revenue threshold to minimize compliance burdens. Income from transactions subject to the levy would be exempt from income tax to prevent double taxation. The Committee also recommends exploring mechanisms for collecting the levy through payment gateways and authorized foreign exchange dealers.