Government gets Rs 146 crore from equalisation levy till Dec 2016-17

NEW DELHI: Government has garnered Rs 146 crore by way of 'Equalisation Levy', which was introduced in this year's Budget to tap tax on income accruing to foreign e-commerce companies from India.

A person making payment exceeding in aggregate of Rs 1 lakh a year to a non-resident, who does not has a permanent establishment in India, for online advertisement has to withhold 6 per cent of the amount paid as Equalisation Levy from June 1, 2016.

"The revenue accrued for the government exchequer through the Equalisation Levy amounts to Rs 146.50 crore from June 1-December 3, 2016," Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Lok Sabha.

The levy will only apply to business to business transactions.

"It is levied in-line with the OECD's Base Erosions and Profit Shifting project to tax e-commerce transactions," he said.

As per the BEPS action plan, OECD has recommended to impose a final withholding tax on certain payments for digital goods or services provided by a foreign e-commerce provider or imposition of a equalisation levy on consideration for certain digital transactions.

The specified services on which this levy is imposed include online advertising or any services, rights or use of software for online advertising, including advertising on radio and television, designing, hosting or maintenance of websites, digital space for website, e-mails, blogs, facility for online sale of goods or services or collecting online payments.