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Equalisaton Levy: May Not Be Applicable on You!
Equalisaton Levy: May Not Be Applicable on You!
Equalisation levy is the first important step taken by government to tax digital economy transactions….So in my previous article, we understood why the tax authorities introduced the concept of equalisation levy…...Endeavouring in this journey further, here is some comforting news...I found few exceptions in the provisions of equalisation levy….These exceptions might help you to avoid payment of this levy.
First article can be read here.
Initially, let’s have a quick recap from the first article in the series of Equalisation Levy:
1. Equalisation levy is attracted when payment is made for availing digital advertising services(e.g. Google ads, facebook ads), and
2. Payment is made to a non resident not having a P.E in India…..
Continuing further……..
Small is not always beautiful….But this time it is…..
How???
Say, in this year you make a small payment of up to Rs 100000 to Google (or any XYZ), ... of course for some advertising campaign of yours...
then no burden on you to deduct equalisation levy…..
This exception will help small enterprises who sometimes rely on digital media for their advertising campaigns….
It’s always good to know about the other person...You may build a new relationship, a lasting friendship….Knowing about the other, may also help you in saving from the necessary trouble of deducting and paying equalisation levy to government…..If the digital advertising services are availed from a non resident who has permanent establishment in India, then you are not required to comply with the provisions of equalisation levy….
Indian tax authorities will recover taxes directly from such non resident by applying PE-based taxation rules….
These are the only 2 exceptions provided in the Act, to skip through the provisions of equalisation levy…..
Once applicable, the payer need to comply with certain other provisions…..Not much to worry about...The compliance provisions are somewhat similar to already existing provision of withholding tax….The compliance provisions are explained in this article….
