Equalisation levy on digital services — can I handle this myself?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the levy applies to specified digital transactions with Indian customers, collected from the payer or the non-resident supplier depending on the category.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Does the equalisation levy apply to what I sell into India?
It depends on the category the supply falls into, and that is a question about the transaction rather than about your business as a whole. The levy reaches specified digital transactions with Indian customers, and for some categories it is collected from the Indian payer while for others it sits with the non-resident supplier. Which rules apply also depends on the period the receipts belong to, because the scope of the levy has not stayed still. We look at what is actually being supplied, who contracts with whom, and where the customer sits, before deciding whether the levy is engaged at all.
Can I claim a foreign tax credit for the equalisation levy?
Do not assume so. The levy sits outside India's income tax act, and foreign credit rules in other countries are generally written to relieve income taxes. A charge imposed under separate legislation may not qualify, which means an amount you have genuinely borne in India can fail to reduce tax anywhere else. The analysis turns on how your own country of residence defines a creditable tax and on how the levy is characterised, and it has to be done before you rely on the credit in a filing position. We set the reasoning out in writing rather than claiming and waiting.
Is the equalisation levy covered by the India tax treaty?
Treaties apply to the taxes they list, and a levy imposed outside the income tax act is not automatically among them. That is the whole difficulty with this charge: the usual arguments a non-resident would run, that there is no permanent establishment or that the treaty caps the rate, may not engage at all. It does not follow that nothing can be said. The right first question is whether the receipt falls into the levy's categories or into ordinary income tax, because those two routes lead to different arguments. We analyse the transaction before choosing which of them applies.
Who pays the levy, me or my Indian customer?
That depends on the category. For some digital transactions the charge is collected from the Indian payer, who deducts it before remitting; for others it rests on the non-resident supplier directly. The practical consequence is contractual as much as fiscal, because a contract that is silent on which party bears the charge tends to be settled by whoever holds the money. Before you invoice, it is worth knowing which side the obligation falls on and saying so in the agreement. We identify the category, then check the contract wording against it.
Why was an amount held back from my invoice to an Indian client?
Where a digital transaction falls into a category the payer is responsible for, the Indian customer deducts the charge and remits it rather than paying you in full. Clients often see the short payment first and the explanation later, sometimes with nothing on the remittance advice to identify what was withheld or under which head. Establishing that is the starting point, because the answer determines whether anything can be recovered, whether it can be relieved where you live, and how the receipt should be recorded. We ask the payer for the deduction particulars and work from those documents.
Do I need a presence in India to be caught by the levy?
Absence of a presence is not the answer here, and that is the point a lot of non-resident suppliers miss. This charge was built to reach digital supplies made to Indian customers by suppliers who have nothing in India at all, so the arguments that keep a non-resident outside Indian income tax do not do the same work against it. What matters is the character of the transaction and the location of the customer. We test those two things first, and only then consider what, if anything, the income tax position adds.
What is DTAA?
DTAA — a Double Taxation Avoidance Agreement — is India's term for a tax treaty. It allocates taxing rights between India and the other country, caps withholding on cross-border payments, and gives relief for income taxed twice by either exempting it or crediting the foreign tax. Relief is claimed, and from the Indian side that normally means a tax residency certificate, Form 10F and Form 67. See DTAA relief.
What is RNOR status?
Resident but not ordinarily resident — a transitional category in India between non-residence and full residence, reached on the day counts after returning from a period abroad. While it lasts, certain foreign income stays outside the Indian tax base, which makes the timing of a return to India worth planning rather than leaving to chance. It is temporary, and the window is set by the day-count rules. See RNOR status.
