Introduction
The Equalisation Levy was introduced by the Finance Act, 2016 on online advertisement services, provision for digital advertising space, or any other facility or service for the purpose of online advertisement only. The Finance Act, 2020, has extended the scope of this levy to e-commerce supply and services.
Transactions Subject to Equalisation Levy
1. Sum received or receivable by a NR for online advertisement services.
2. Sum received or receivable for e-commerce supply of goods or services made or facilitate on or after 1st April 2020.
3. The CG May also specify any other service on which such levy shall be chargeable
Equalisation Levy Rate
1. On Online advertisement service rate is 6%.
2. On E-commerce supply of goods or service rate is 2%.
Any Income which is chargeable to equalisation levy is exempt from income tax act u/s 10(50).
The equalisation levy shall be deductible by recipient of service being a resident of India carrying on business or profession or a NR having a Permanent Establishment (PE) in India.
NO Equalisation Levy in Following Conditions
1. The consideration received or receivable in India is taxed as royalty or fees for technical service in India and such taxability arise under income tax act read with the DTAA notify by CG u/s 90 or 90A.
2. If NR having a PE in India and the service is effectively connected with such PE.
3. If Consideration is less than threshold limit i.e. 1 lakh for Online Advertisement service and for e commerce limit is 2Crore.
4. Service is not received for business or professional purpose or received for personal purpose.
Due Date to Deposit Equalisation Levy
1. In Case of Online Advertisement Service :- Till 7th Day of Next month in which such levy is deducted.
2. In Other Case :- Till 7th Day of next month after end of quarter in which such levy is deducted but in case of March month quarter last date is 31st march of same month.
Amount is paid in Challan ITNS 285.
Statement of Equalisation Levy
Statement of equalisation levy is required to be furnished on or before 30th June of the financial year immediately following the financial year in which equalisation levy is chargeable in Form 1.
In summary, understanding the Equalisation Levy entails exploring its evolving scope, specific rates, and the intricacies of compliance. Stay informed about its application to online advertising and e-commerce, applicable conditions, and the requisite timelines for depositing the levy and filing statements.
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