Equalisation levy
This query is : Resolved
14 June 2016
Dear Sirs,
The CBDT has recently notified the Equalisation Levy Rules, 2016 effective June 1, 2016. As per these rules, we should withhold 6% as Equalisation Levy for all the payments (outward remittance) made to Companies like Facebook who doesn't have a PE in India. We have availed the said services from Facebook and we have Invoices due for the month of April & May which will be paid in June and July 2016. Please clarify if we are supposed to withhold Equalisation levy even for the invoices of April & May or it will be applicable for only invoices raised after June 1, 2016.
The CBDT has recently notified the Equalisation Levy Rules, 2016 effective June 1, 2016. As per these rules, we should withhold 6% as Equalisation Levy for all the payments (outward remittance) made to Companies like Facebook who doesn't have a PE in India. We have availed the said services from Facebook and we have Invoices due for the month of April & May which will be paid in June and July 2016. Please clarify if we are supposed to withhold Equalisation levy even for the invoices of April & May or it will be applicable for only invoices raised after June 1, 2016.
14 June 2016
The levy would not be applicable to nonresident service
providers having a PE in India, as they will be subject to
regular PE-basis taxation. The levy is currently applicable
only on B2B transactions, if the aggregate value of
consideration in a year exceeds approximately US$1,500.
providers having a PE in India, as they will be subject to
regular PE-basis taxation. The levy is currently applicable
only on B2B transactions, if the aggregate value of
consideration in a year exceeds approximately US$1,500.
14 June 2016
Facebook doesn't have a PE in India, so they will be subject to Equalisation Levy. My question is what is the point of taxation for Equalisation Levy, is it Invoice date or payment date?
15 June 2016
Langauge of Section 165 of FA Act,2016 suggest that its applicable for services received on or after 1/06/2016.
Charge of equalisation levy.
165 . (1) On and from the date of commencement of this Chapter, there shall be charged an equalisation levy 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.
Charge of equalisation levy.
165 . (1) On and from the date of commencement of this Chapter, there shall be charged an equalisation levy 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.
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