Equalisation levy Meaning

By | June 5, 2016

Equalisation levy Meaning

Equalisation levy  shall be charged on any specified service received or receivable by a person.

“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;

Equalisation levy is imposed by  CHAPTER VIII  of Finance Act 2016 ,which extend to whole of India except the State of Jammu and Kashmir. Equalisation levy shall come into force w.e.f 01.6.2016


  • Equalisation levy shall be charged at the rate of six per cent. of the amount of consideration for any specified service received or receivable by a person, being a non-resident from––

    (i) a person resident in India and carrying on business or profession; or

    (ii) a non-resident having a permanent establishment in India.

  • The equalisation levy  shall not be charged, where––

    (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 one lakh rupees; 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.

  • The equalisation levy 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. (i.e if equalisation levy deducted in the month of June 2016 , it shall be paid by 7th July 2016)


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