Section 167 of the Finance Act, 2016 (Chapter VIII) governs the furnishing of statements for the Equalisation Levy in India, applicable to both the 6% levy on specified services (under Section 165) and the 2% levy on e-commerce supply or services (under Section 165A). Below is a concise and comprehensive explanation of the provisions for furnishing statements under Section 167.
1. Overview of Section 167
Section 167 mandates that assessees (Indian residents or non-residents with a Permanent Establishment in India) and e-commerce operators (non-residents without a PE in India) must file an annual Equalisation Levy Statement in Form 1. This statement summarizes all specified services or e-commerce transactions subject to EL during the financial year .
2. Key Requirements
A. Who Must File?
- Assessees: Entities deducting EL under Section 166 (6% levy)for specified services (e.g., online ads).
- E-commerce Operators: Non-residents liable for Section 166A (2% levy)on e-commerce supplies/services .
B. Filing Deadline
- The statement must be filed by June 30of the financial year immediately following the relevant FY (e.g., FY 2024-25’s statement is due by June 30, 2025) .
C. Late/Revised Submissions
- A revised statementcan be filed within 2 years from the end of the FY in which the transaction occurred.
- If the Assessing Officer (AO) issues a notice for non-filing, the statement must be submitted within the prescribed time.
3. Form and Content of the Statement
- Form 1: Includes details such as:
- Gross consideration paid/received.
- EL deducted/deposited.
- Interest/penalties, if applicable.
- Verification: Must be digitally signed and verified as per prescribed rules.
4. Centralized Processing Scheme (2023)
The Centralized Processing of Equalisation Levy Statement Scheme, 2023 streamlines EL statement processing:
- Automated Adjustments: Corrects arithmetic errors and computes interest automatically.
- Refunds/Demands: Determines payable sums or refunds within 1 yearof filing.
- Invalid Statements: The Commissioner may reject statements for:
- Use of unapproved software.
- Incomplete information.
5. Penalties for Non-Compliance
- Late Filing: ₹100/day until compliance.
- False Statements: Prosecution with fines or imprisonment up to 3 years.
- Non-Deduction: Disallowance of expenses + penalty equal to the unpaid levy.
6. Key Exemptions
No statement is required if:
- Transactions are linked to a Permanent Establishmentin India.
- Payments are for personal use(non-business).
7. Practical Example
Scenario: An Indian company pays ₹30 lakh to Google (non-resident) for ads in FY 2024-25.
- Action: Deduct 6% EL (₹1.8 lakh) and file Form 1 by June 30, 2025.
8. Recent Updates
- The 6% levy on online adsmay be abolished from April 2025, but the 2% e-commerce levy remains.
Key Takeaways
- File Form 1 by June 30
- Use the Centralized Processing Schemefor faster resolution.
- Penalties apply for delays or inaccuracies.
