Equalisation Levy….Or Google Tax, What is it???

Google and other large social networking sites operate through outside India when it comes to provision of digital advertising space...Such companies claim that since they provide advertising services through outside India, such provision of service shall not be taxable in India….

On the contrary, the view held by the Revenue is that since such advertising service is provided to a person in India and mainly the intended audience of such advertisement is Indians, Google and other gigantic e-commerce companies shall pay tax in India…..

So, to tax such transactions, concept of Equalisation Levy came into force….The particular services covered by the tax include online advertising, provision for digital advertising space…

For Illustration:

In above image, 99acres & snapdeal has paid money to Google to promote their site and to list their site at topmost whenever any user searches for keyword:House/Property…..

On such payment, 99acres & Snapdeal need to pay 6% of the amount paid to google as  equalisation levy to the Government.

For other relevant provisions relation to E.L, stay tuned at Shocks N Mocks.