In past few years, the Digital
Ads Like Google, Facebook, Twitter, Linkedin, Yahoo and other advertising
concerns has grown rapidly. Moreover, no tax has been applicable on these
companies. But Budget 2016 has introduced Equalization Levy @6% on Digital Ads.
There are many digital ads
companies which are generating huge revenues from india and they are not liable
to pay any income tax in india even though they don’t have any permanent
establishment in India. The Budget 2016 introduce “Equalization Levy @6%” on
specified services which are provided by Non Resident Service Providers to
Indian Residents.
EQUALISATION LEVY
1. Applicability of Equalisation Levy
a) Equalisation
Levy has extends to the whole India except Jammu and Kashmir. It shall come
into force w.e.f 01st June, 2016.
b) Equalisation
Levy shall be deducted by every person (the assesse), being
(i) a person resident in India and carrying on
business or profession; or
(ii) a non-resident having a permanent establishment
in India.
@6% of the
amount of consideration for any specified service paid or payable to a person,
being a non-resident.
c) “specified
service” means online advertisement, any provision for digital advertising
space or any other facility or service for the purpose of online advertisement
and includes any other service as may be notified by the Central Government in
this behalf.
2. Non-Applicability of Equalisation Levy
The equalization levy shall not be charged, where–
(i) the non-resident providing the specified service
has a permanent establishment in India
and the specified service is effectively connected with such permanent
establishment
(ii) the value if services, does not exceed one lakh rupees;
or
(iii) where the payment for the specified service not for
the purposes of carrying out business or
profession.
3.
Collection
and recovery of equalisation levy
The assessee shall
be paid to the credit of the Central Government by the seventh day of the month
immediately following the calendar month in which amount of Specified services
had been paid.
4. Interest on delayed payment of equalisation
levy.
Every assessee, who fails to deposit the equalisation
levy to Central Government, shall pay simple interest at the rate of one
per cent per month of such levy
5. Penalty for failure to deduct or pay
equalisation levy
Any assessee who fails to deduct or having deducted but
fails to pay such levy to the Central Government, shall be liable to pay,—
(i)
a penalty equal to the amount of equalisation levy that he failed to deduct;
and
(ii) a penalty of one thousand rupees for every day during
which the failure continues not exceed the amount of equalisation levy that he
failed to pay.
Reference
