FINANCE ACT, 2020

Section 165A read with Section 166A

Equalizations levy - Stay of payment of equilization levy - Assessee not having any permanent establishment in India -

Present application was filed by petitioner seeking stay of payment of equalization levy under section 165A read with section 166A of the Finance Act, 2016 as amended by Finance Act, 2020 during the pendency of instant writ petition. Petitioner's case was that it was not liable to tax in India as its core business was carried outside India and none of the activities which were carried out in India resulted in existence of either a permanent establishment (“PE”) or the payment received by it could be characterized as Royalty. Held: Levy was introduced with effect from 01st April, 2020 by amendment of the Finance Act, 2016 vide the Finance Act, 2020 and is being levied on the entities that do not have a PE in India. Since it was applicant's case that it did not have a PE in India, it would be liable to pay tax under the new levy. However, according to the applicant, any further payment would result in double taxation. Revenue submitted that, it had no desire or authority of collecting levy from applicant in respect of the income on which income tax has been paid by applicant either as advance tax or as TDS made by its customer banks in India during the pendency of this writ petition. Consequently, averments made in the aforesaid paragraphs by revenue were accepted by Court and revenue was held to be bound by the same.

REFERRED :

FAVOUR : In favour of petitioner

A.Y. :

SUBSCRIBE FOR FULL CONTENT

OR Try Reload the Page