EQUALISATION LEVY-ADDITIONAL TAX ON ADVERTSING

 Effective date

This levy shall come into force on June 1, 2016.

 Charge of equalisation levy

Following persons
a) a person resident in India and carrying on business or profession; or
b) a non-resident having a permanent establishment in India.
have to charge/deduct at the rate of 6% of the amount of consideration for any specified service, paid or payable to a non-resident

 Definitions

“Specified Service”is defined as follows:
(1) Online advertisement;
(2) Any provision for digital advertising space or facilities/ service for the purpose of online advertisement;
(3) Any other service which may be notified by Central Government.

“Permanent establishment” includes a fixed place of business through which the business of the enterprise is wholly or partly carried on.

 When Equalisation Levy is not applicable

a) The non-resident providing the specified service has a permanent establishment in India
and the specified service is effectively connected with such permanent establishment.
b) The aggregate amount of consideration for specified service received or receivable in a previous year by the non-resident from a person resident in India and carrying on business or profession, or from a non-resident having a permanent establishment in India, does not exceed 1 Lakhs. Or
c) Where the payment for the specified service by the person resident in India, or the permanent establishment in India is not for the purposes of carrying out business or profession.

 Payment of Equalisation levy deducted

The equalisation levy so deducted during any calendar month shall be paid by every assessee to the credit of the Central Government by the seventh day of the month immediately following the said calendar month.

Person can pay their payment with going through below link :-

https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

 Furnishing of Statement

Payer responsible for deduction of equalisation levy shall furnish a statement electronically in form No. 1 in respect of all specified services entered into during a financial year. Such statement shall be furnished on or before June 30 immediately following of financial year.

 Interest on delayed payment

In case of delayed payment assesse shall pay simple interest at the rate of 1% of such levy for every month or part of a month by which such crediting of the tax or any part thereof is delayed.

 Penalty

S No. Situations Penalty (in addition to paying equalisation levy and interest)
1 Failure to deduct equalisation levy (wholly or partly) A penalty equal to amount of equalisation levy
2 Failure to deposit equalisation levy with Government Rs 1,000 for each day of default (not to exceed amount of equalisation levy)
3 Failure to furnish statement Rs 100 for each day of default.

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