The Equalisation Levy imposed on online advertising ceases from AY 2026-27 due to a sunset clause in the Finance Act, 2024. This impacts e-commerce transactions significantly.
Understanding Equalisation Levy
The Equalisation Levy, which was previously imposed on online advertisements, will cease to apply from the Assessment Year 2026-27 as per a sunset clause included in the Finance (No. 2) Act, 2024. This amendment effectively terminates the 2% levy on e-commerce supplies and services for any consideration received on or after 1 August 2024.
This change is likely to have substantial implications for the e-commerce sector and advertisers who have to now adjust their pricing models and strategies accordingly.
Professionals operating in this realm should ensure their clients are aware of these changes for effective tax planning and compliance to avoid any pitfalls as they transition into a new regulatory landscape.
Citations
- Finance (No. 2) Act, 2024
