Equalisation Levy Rules Notified
GOVERNMENT has notified the Equalisation Levy Rules, 2016. Equalisation Levy was introduced in the Finance Act 2016.
As per Section 165 of the Finance Act 2016, 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.
Every person, being a resident and carrying on business or profession or a non-resident having a permanent establishment in India (assessee) shall deduct the equalisation levy from the amount paid or payable to a nonresident in respect of the specified service, if the aggregate amount of consideration for specified service in a previous year exceeds one lakh rupees.
The Rules come into force on the 1st of June 2016.
As of now, the 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.
Some of these transactions may also attract reverse charge of Service Tax. How to compute this 6%? with addition of Service Tax? TDS is not required to be added for Service Tax. Why can't the CBEC and CBDT give an illustration?
CBDT Notification No.38/2016, Dated: May 27, 2016