Sudoku Ltd., an Indian company, is engaged in the business of manufacture and sale of lamp shades. To expand its international sales, it hired the services of a New York based company, Moon Inc., for online advertisement

CS Professional · Advanced Tax Laws · PYQS · June 2024
Sudoku Ltd., an Indian company, is engaged in the business of manufacture and sale of lamp shades. To expand its international sales, it hired the services of a New York based company, Moon Inc., for online advertisements. Moom Inc. has no permanent establishment in India. During the previous year 2023-24, Sudoku Ltd. paid ₹ 6 lakhs to Moon Inc. for such services and deducted the equilization levy on 15.03.2024 and credited it to the account of Central Government on 16.04.2024. You are required to: (i) Compute interest leviable to Sudoku Ltd. on the delayed payment of equalization levy.

Answer & Explanation:

Equalisation levy = 6% of ₹ 6 lakhs = ₹ 36,000 The equalization levy deducted on 15.03.2024 has to be paid to the credit of the Central Government by 07.04.2024 (i.e., 7th of the succeeding month). However, in this case, Sudoku Ltd. remitted the same only on 16.04.2024. The delay in this case is 9 days. Simple interest @ 1% is leviable per month or part of month by which crediting of tax is delayed. Accordingly, interest would be 1% of ₹ 36,000 = ₹ 360.

Topics: Equalization Levy

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