The government is expected to cancel the equalization fee for online advertising with effect from 1 April this year.
According to sources, this step is probably part of the amendments to the Financial Act, 2025. 6% of the run, which was introduced as part of the Financial Act 2016 and is charged with “Partition for services in the nature of online advertising, provision for digital advertising space, any other equipment or services for online advertising”. In fact, it is selected for online payments to large big organizations such as Google and Meta.
This step comes significantly at a time when concerns have appeared on this matter several nations, including the US.
Vishwas Panjiar, Partner, Nangia Andersen noted that the compensatory fee has always been an imperfect and symptomatic solution to bring the digital transaction under the tax, until the global and all -pre -intended consensus was achieved between countries. In addition to the compensatory fee, India also introduced the concept of significant economic presence (SEP) in its domestic right to focus on foreign companies that have a significant online presence in India.
“The government step towards designing a completely abolition fee is a step in the right direction, because it not only brings security to the taxpayer, but also deals with concern by the raised partner nations (as the US) of the unilateral nature of the fee in the first place,” he said.
The Financial Act, 2020, also expanded the scope of this fee for the supply and services of electronic trading and services set out in April 1 2020 or later in the amount of 2%. However, it was abolished in the Union budget, which was submitted in July 2024 with effect from August.
According to sources, in addition to the abolition of the equalization fee on online commercials, the financial law changes 2025 are not very essential and are largely only procedural.
Lok Sabha took over the financial account for assessing and handing over March 24th.
