FEMA and International Taxation
- Foreign Contribution (Regulation) Act, 2010
- Accounts & Audit
- All FCRA services online
- Applicability
- Change of designated bank account, name, address, aim, objects or key members of the association
- Declaration of receipts of foreign contribution
- Foreign Contribution
- Inspection & Seizure
- Introduction
- Penalty
- Registration of the Association
- Restriction on Administrative Expenses
- Restrictions on acceptance of foreign hospitality
- Restrictions on Accepting FC
- Speculative Activity
- Total Ban on acceptance of Foreign Contribution & Hospitality
- Transfer of FC to other Registered or Unregistered Persons
- Foreign Exchange Management Act, 1999
- Acquisition and transfer of Immovable property in India
- Acquisition and Transfer of Immovable Property outside India
- Bank Accounts in India
- Borrowings from Non-residents
- Branch/Liaison/Project Office in INDIA
- Branch/Liaison/Project Office outside India
- Capital & Current Account Transactions
- Compounding & Contravention under FEMA
- Cross Border Merger Regulations
- Introduction
- Investment in India
- Miscellaneous
- Overseas Direct Investments
- Residential Status under FEMA
- Trade Transactions – Import & Export
- International Taxation
Equalisation Levy
The Finance Act, 2016 introduced a new Chapter VIII called Equalisation Levy (EL) and comes into force from 1st June, 2016.
“Equalisation Levy” means the tax leviable on consideration received or receivable for any specified service under the provisions of this Chapter.
Charge of Equalisation Levy
An Equalisation Levy is applicable 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—
- A person resident in India and carrying on business or profession; or
- A non-resident having a permanent establishment in India.
Exceptions to the above:
- The non-resident providing the specified service has a permanent establishment in India and the specified service is effectively connected with such permanent establishment;
- The aggregate amount of consideration in a previous year does not exceed one lakh rupees; or
- Where the payment for the specified service by the person resident in India, or the permanent establishment in India is not for the purposes of carrying out business or profession.
Collection and recovery of Equalisation Levy
Payment of EL
The Equalisation Levy so deducted during any calendar month shall be paid by the seventh day of the month immediately following the said calendar month by remitting into Reserve Bank of India, State Bank of India or any bank authorised for the purpose along with Equalisation Levy Challan.
Failure to deduct
Any assessee who fails to deduct the levy, be liable to pay the levy himself in addition to interest and penalty.
Furnishing of statement
Due date for statement
Every assessee shall, by 30th June after the end of each financial year, prepare and deliver a statement in Form 1, duly verified in the manner indicated and furnished in the following manner:-
- Electronically under digital signature; or
- Electronically through electronic verification code
Interest on delayed payment of Equalisation Levy
Failure to pay the Equalisation Levy, shall be liable to pay simple interest at the rate of one per cent of such levy for every month or part of a month.
Penalty for failure to deduct or pay Equalisation Levy
Any assessee who —
Fails to deduct the whole or any part of the Equalisation Levy will be liable to pay a penalty equal to the amount of Equalisation Levy that he failed to deduct.
Or after deducting, fails to pay, in addition to paying the levy and interest, a penalty of one thousand rupees for every day during which the failure continues, however, that the penalty under this clause shall not exceed the amount of equalisation levy that he failed to pay.
Penalty for failure to furnish statement
Where an assessee fails to furnish the statement within the time, shall be liable to pay a penalty of one hundred rupees for each day during which the failure continues.
Penalty not to be imposed in certain cases
No penalty shall be imposable for any failure referred to in the said sections, if the assessee proves to the satisfaction of the Assessing Officer that there was reasonable cause for the said failure. Further, assessee shall be given a reasonable opportunity of being heard.