India: Equalization levy could not be imposed on online advertising charges (tribunal decision)
A tribunal decision concerning whether equalization levy could be imposed on online advertising charges.
A decision concerning whether equalization levy could be imposed on online advertising
The Jaipur Bench of the Income-tax Appellate Tribunal held that the 6% equalization levy (EL) could not be imposed on online advertising charges paid by an Indian company to a non-resident company because the advertiser, the targeted audience and the advertising platform were all outside India, and the Indian company was merely acting as a conduit.
The case is: DCIT v. Prakash Chandra Mishra
Background
The Finance Act, 2016 introduced an EL on payments for online advertisement, any provision for digital advertising space, or any other facility or service for the purpose of online advertisement—effective 1 April 2016.
The EL is applicable on consideration received by a non-resident, from a person resident in India and carrying on a business or profession or a non-resident having a permanent establishment in India.
Read an October 2022 report [PDF 406 KB] prepared by the KPMG member firm in India
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