Equalisation Levy – Applicability of Non-Discrimination Rules in International Agreements

Abstract

The Indian Finance Act, 2016 has introduced an equalisation levy on online advertising services with effect from June, 2016. The Report on Digital Economy as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project has articulated the concerns of various countries across the world about the ease with which businesses that make the digital economy escape a taxing presence in the countries from where they earn their revenues as well as their "home" countries. This article examines whether or not this equalisation levy is in accordance with the non-discrimination provisions in the double tax conventions as well as the WTO Agreements, more particularly, the General Agreement on Trade in services (GATS).