Collection & Recovery of Equalisation Levy on Specified Service – Section 166, Finance Act, 2016 - International Taxation - Income Tax

Collection Recovery of Equalisation Levy on Specified Service Section 166 Who is responsible for deduction of equalization levy Every person, being a resident and carrying on business or profession or a non-resident having a permanent establishment in India hereafter in this Chapter referred to as assessee shall deduct the equalisation levy referred to in section 165(1) from the amount paid or payable to a non-resident in respect of the specified service. Rate of equalization levy 6% of the amount of consideration for specified service paid or payable to a non-resident I respect of specified service by a person resident in India and carrying on business or profession or a non-resident having a PE in India. [the amount of Equalisation levy, interest and penalty payable, and the amount of refund due, shall be rounded off to the nearest multiple of ₹10 and, for this purpose any part of a rupee consisting of paise shall be ignored and thereafter if such amount is not a multiple of ten, then, if the last figure in that amount is five or more, the amount shall be increased to the next higher amount which is a multiple of ten and if the last figure is less than five, the amount shall be reduced to the next lower amount which is a multiple of ten. Rule 3 of Equalisation Rules] . Threshold limit Equalisation levy is deductible if the aggregate amount of consideration for specified service in a previous year exceeds ₹1 Lakhs. Time period for remittance equalization levy The equalisation levy so deducted during any calendar month shall be paid by every assessee to the credit of the Central Government by the 7th of the month immediately following the said calendar month. [The assessee who is required to deduct and pay equalisation levy, shall pay the amount of such levy, by remitting it into the Reserve Bank of India or in any branch of the State Bank of India or of any authorised Bank accompanied by an equalisation levy challan. [Rule 4 of Equalisation Levy Rules, 2016] Consequence of failure to deduct equalization levy In case of failure to deduct equalization levy, such assessee, notwithstanding such failure, be liable to pay the levy to the credit of the CG by the 7 th of the month immediately following the said calender month.