{"id":485,"date":"2017-12-22T11:34:44","date_gmt":"2017-12-22T11:34:44","guid":{"rendered":"http:\/\/ventureasy.com\/blog\/?p=485"},"modified":"2019-05-14T08:14:42","modified_gmt":"2019-05-14T08:14:42","slug":"equalization-levy","status":"publish","type":"post","link":"https:\/\/ventureasy.com\/blog\/equalization-levy\/","title":{"rendered":"Equalization Levy"},"content":{"rendered":"

The digital economy in India is growing at a rapid pace by each passing year. Till recently, most of the Non Resident companies<\/strong>, which form an integral part of providing digital services did not have to pay any tax in India. Neither were they subjected to any withholding taxes, since the performance for the services were not executed in India. Moreover, as they do not have a Permanent Establishment in India, their revenue cannot be attributed to the operations in India. Hence, no tax applies on the same.<\/p>\n

Equalization Levy <\/strong>is a recent tax structure introduced in India in order to impose tax on specified services <\/strong>provided by Non-Residents<\/strong>, who earn revenue from India in excess of the threshold prescribed.<\/p>\n

Any person or entity which makes a payment exceeding Rs 1 lakh<\/strong> in a financial year to a\u00a0non-resident technology company<\/u><\/strong><\/em>\u00a0for some B2B {Business to Business Services} needs to withhold 6% as Equalization Levy, on the gross amount being paid out.<\/p>\n

\"Equalization
Equalization Levy<\/figcaption><\/figure>\n

Scope of Levy:<\/strong><\/p>\n