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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