So I’m in my final year of articleship, also prepping for CA Finals, and I’ve hit this Equalisation Levy question I can’t fully resolve.
The situation: a foreign company is providing online advertising services to an Indian company, but the payment isn’t going directly to the foreign entity — it’s being routed through a third-party intermediary in Singapore. The Indian company’s position is that since the direct payment goes to the Singaporean intermediary and not to the non-resident service provider, Equalisation Levy simply doesn’t apply.
But Section 164(ca) of the Finance Act, 2016 uses the phrase “consideration received or receivable.” That word “receivable” is doing a lot of work here — does it extend to situations where the non-resident is ultimately the one benefiting, even if the money technically flows through a third party? I keep going back and forth because of general tax avoidance principles, but tracing the ultimate beneficiary in practice is genuinely difficult. Has anyone dealt with a similar structure and figured out how to approach the levy applicability?