Flax (P) Ltd. availed online digital advertisement service provided by Marshall Inc. of USA in March 2024. It paid 10 lakhs and the amount…

CA Final · Direct Tax Laws and International Taxation · MTP · May 2024
Flax (P) Ltd. availed online digital advertisement service provided by Marshall Inc. of USA in March 2024. It paid 10 lakhs and the amount outstanding as on 31st March, 2024 was 2 lakhs for the said online digital advertisement service. Marshall Inc. is also an e-commerce operator who sold its goods to customers resident in India for 180 lakhs during the financial year 2023-24. Also, during the same year, Marshall Inc. sold goods for 70 lakhs to customers outside India but has used IP address in India for the purchase of those goods.
(A) Equalization levy of 60,000 is to be deducted and paid by Flax (P) Ltd.
(B) Equalization levy of 72,000 is to be deducted and paid by Flax (P) Ltd.
(C) Equalization levy of 24,000 is to be paid by Marshall Inc.
(D) Equalization levy of 72,000 is to be paid by Marshall Inc.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Equalization levy of 72,000 is to be deducted and paid by Flax (P) Ltd.

Topics: Double Taxation Relief, Non-Resident Taxation

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