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Indian Equalization Levy Implementation Successful

by Lorys Charalambous, Tax-News.com, Cyprus

19 December 2016


India's new equalization levy on specified digital services has fetched the Government over INR1.46bn (USD21.5m) in revenue in six months, Minister of State for Finance, Santosh Gangwar, has revealed.

The 2016 Budget included proposals for an "equalization levy" of six percent of the consideration paid for online advertising services received by a non-resident without a permanent establishment in India from an Indian tax resident. The levy covers only business-to-business transactions worth INR100,000 (USD1,484) or more and was introduced from June 1, 2016.

"The revenue accrued for the Government exchequer through the equalization levy amounts to INR1.46bn from June 1, 2016, to December 3, 2016," Gangwar said in response to a question posed by a lawmaker in India's lower house of Parliament on December 9.

The levy was proposed by India in response to the value-added tax recommendations put forward by the OECD on the taxation of the digital economy under Action 1 of its base erosion and profit shifting initiative.

TAGS: compliance | Finance | tax | business | value added tax (VAT) | tax compliance | India | law | enforcement | multinationals | legislation | tax planning | tax reform | trade | services | BEPS

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