If you use Google Adwords to promote your online business, you might have received this email about Equalisation Levy.
This is to inform you that as per the Notification No. 37/ 2016: F.No. 370142/12/2016-TPL dated 27 May 2016 read with Finance Act, 2016, Government of India has levied an ‘Equalisation Levy’ on provision of online advertisement services or any other service or facility for the purpose of online advertisement by a Foreign Company provided on or after June 1, 2016 to specified customers in India. The applicable rate of the levy is 6% of value of fees for providing online advertisement or related services.
As you are aware, the terms and conditions applicable to AdWords require customers to bear any tax or Government charges on the services availed of by them.
Accordingly, with respect to invoices raised by Google for online advertisement and service for the purpose of online advertisement provided on or after 1 June 2016, you will need to deposit 6% Equalisation Levy (as applicable).
So basically, if you show that you offer online advertisements to anyone, you must deposit equalisation levy to the government, or in this case to the Google.