Equalisation Levy: Features, Applicability, Penalty

Concept of Equalisation was introduced in India and took influence from 01.06.2017. This financial act provide a new “Equalisation Levy” of 6% on consideration received against services provided to Indian Resident or a Non-resident person who has permanent establishment in India by a Non-resident person without any permanent establishment in India.

Global advertising companies are indirectly affected by Equalisation Levy concept by way of taxation.

APPLICABILITY

When resident or non-resident who have permanent establishment in India need to pay consideration to another non-resident trader.
If the consideration against services is meet at least Rs. 1,00,000 in one financial year.

SERVICES COVERED

There are only two kinds of services which are fall under Equalisation Levy criteria:-

Digital advertising services
Online advertisement and sales promotion

DUE DATES

Every Taxpayer have to deposit levy tax within the 7th of following or next month
And taxpayer needs to file the annual statement of Equalisation levy by 30th June of following financial year.

DELAYED PAYMNET CONSEQUENCES (INTEREST & PENALTIES)

Interest shall be charged as 1% per month or part of the month if any compliance of Equalisation levy is not meet by the service recipient.
When the person charge Equalisation levy but not deposit the same then the penalty is Rs. 1000/- per day along with the interest amount and other depositions.
In case when taxpayer fails to file Equalisation levy statement, then payer have to pay penalty of Rs. 100/- per day till the default continues.

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