PART XIII
AMENDMENT TO THE FINANCE ACT, 2016
Amendment of Act 28 of 2016.
159. In the Finance Act, 2016,––
(a) the following amendments shall be made and shall be deemed to have been made with effect from the 1st day of April, 2020, namely:––
(i) in section 163, in sub-section (3), the following proviso shall be inserted, namely:––
“Provided that the consideration received or receivable for specified services and for e-commerce supply or services shall not include the consideration, which are taxable as royalty or fees for technical services in India under the Income-tax Act, read with the agreement notified by the Central Government under section 90 or section 90A of the said Act.”;
(ii) in section 164, in clause (cb), the following Explanation shall be inserted, namely:––
‘Explanation.––For the purposes of this clause, “online sale of goods” and “online provision of services” shall include one or more of the following online activities, namely:––
(a) acceptance of offer for sale; or
(b) placing of purchase order; or
(c) acceptance of the purchase order; or
(d) payment of consideration; or
(e) supply of goods or provision of services, partly or wholly;’;
(iii) in section 165A, in sub-section (3),––
(A) in the opening portion, for the words ‘section, “specified circumstances” mean––’, the following shall be substituted, namely:––
‘section,––
(a) “specified circumstances” mean––’;
(B) after clause (a) as so amended, the following clause shall be inserted, namely:––
“(b) consideration received or receivable from e-commerce supply or services shall include––
(i) consideration for sale of goods irrespective of whether the e-commerce operator owns the goods;
(ii) consideration for provision of services irrespective of whether service is provided or facilitated by the e-commerce operator.”.
(b) in section 191, in the proviso, after the word “refundable”, the words “without any interest” shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2016.
Notes on Clauses:
Clause 159 of the Bill seeks to amend sections 163, 164,165A and 191 of the Finance Act, 2016.
It is proposed to insert a proviso to sub-section (3) of section 163 of the said Act to provide that the consideration received or receivable for specified services and consideration received or receivable for e-commerce supply or services shall not include the consideration, which are taxable as royalty or fees for technical services in India under the Income-tax Act read with the agreement notified by the Central Government under section 90 or section 90A of the said Act.
It is further proposed to insert an Explanation in clause (cb) of section 164 of the said Act to provide that for the purpose of defining e-commerce supply or service, “online sale of goods” and “online provision of services” shall include one or more of the following online activities, namely:––
(a) acceptance of offer for sale;
(b) placing of purchase order;
(c) acceptance of the purchase order;
(d) payment of consideration; or
(e) supply of goods or provision of services, partly or wholly.
It is also proposed to amend sub-section (3) of section 165A of the said Act to provide that consideration received or receivable from e-commerce supply or services shall include–
(i) consideration for sale of goods irrespective of whether the e-commerce operator owns the goods;
(ii) consideration for provision of services irrespective of whether service is provided or facilitated by the e-commerce operator.
These amendments will take effect retrospectively from 1st April, 2020.
It is also proposed to amend section 191 of the Finance Act, 2016 relating to exemption from wealth-tax in respect of assets specified in declaration.
The said section, inter alia, provides that any excess amount of tax, surcharge or penalty paid in pursuance of a declaration made under the Income Declaration Scheme, 2016 shall not be refundable. The proviso to the said section provides that the Central Government may, by notification, specify a class of persons to whom the excess amount so paid shall be refundable.
It is proposed to amend the said proviso to provide that such excess amount of tax, surcharge or penalty paid in pursuance of a declaration made under the aforementioned Scheme shall be refundable to the specified class of persons without payment of any interest.
This amendment will take effect retrospectively from 1st June, 2016.
