1. Equalisation Levy An Analysis

2. 1. Resident carrying on B/P in India
Consideration received by non-resident not having PE in India w.r.t “Specified Services”
Paid by
1. Resident carrying on B/P in India
2. NR having PE in India
Income
Exempt u/s 10(50)
Expense
Disallowed u/s 40(a)(ib) if not deducted or not remitted after deducting

3. It is to tax the e-commerce transaction/digital business which is conducted without regard to national boundaries
The equalization levy would be 6% of the amount of consideration for specified services received or receivable
“Specified services” 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.
No levy if
If service provider being a non-resident has PE in India and the service is in connection with the PE
Service provider is a resident in India.
Aggregate amount of consideration is less than Rs 1 lakh in the PY
It is not paid for the purpose of Business or Profession
The levy to be remitted within 7th of following month
Equalisation levy Statement to be filed within 30th June of following year

4. Interest on delayed payment of Equalisation Levy
1% p.m or part of month for the period of levy (on such levy)
Penalty for Failure to Deduct or Pay Equalisation Levy (Sec 171)
Failed to deduct levy: Equal to amount of Equalisation levy
Levy has been deducted but not deposited: Rs 1,000 per Day not exceeding the levy
Penalty for Default in Furnishing Statement in Form 1 (Sec 172)
Rs 100 Per day till the default continues