No Equalisation levy on sum paid to ‘Google’ for Ads if target audience is located outside India: ITAT

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  • Last Updated on 14 November, 2022

Equalisation levy

Case Details: DCIT v. Prakash Chandra Mishra - [2022] 143 121 (Jaipur - Trib.)

Judiciary and Counsel Details

    • Dr S. Seethalakshmi, Judicial Member & Rathod Kamlesh Jayantbhai, Accountant Member
    • Rajeev Sogani and Rohan Sogani, CA’s for the Appellant.
    • P.R. Meena, CIT for the Respondent.

Facts of the Case

Assessee was an individual operating the business of providing support services for online ads, Digital Marketing and Web Designing. The assessee was an agent of Google Singapore.

Assessee carried out an online advertising campaign for his clients for availing of Google Singapore services. During the relevant year, assessee had made payment to Google Singapore towards online advertisement on behalf of his clients.

During scrutiny, the Assessing Officer (AO) made addition under section 40(a)(ib) for non-charging of Equalization levy (EL) as the conditions prescribed under section 165 of the Finance Act, 2016 are fulfilled.

On appeal, the CIT(A) reversed the order of the AO. The matter reached the Jaipur Tribunal.


The Jaipur Tribunal has held the assessee was acting only as an agent of Google Singapore. On approaching the assessee, the assessee’s client gets login credentials, generated by the assessee on the website of Google. Through such credentials, the person on their own runs advertisements on Google.

Such a person decides where the advertisement is to be run in which geographical location, who would be the targeted audience, and for how much duration such advertisement is to run. All such aspects are decided by the person advertising and not by the assessee. The assessee was merely a conduit for getting the advertisement run on Google.

Thus, when the intention of the levy was related to the targeted audience and the party paying the online advertisement had no relation in India, EL is not attracted.

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