Is the Equalisation Levy Still Applicable in India? (No — Fully Abolished)

No — the Equalisation Levy is fully abolished in India. The 2% levy on non-resident e-commerce operators ended 1 August 2024, and the 6% levy on online advertising ended 1 April 2025. In 2026 there is nothing left to pay or withhold under it. If a legacy article, advisor or platform still references a 2% or 6% charge on your gross India revenue, that information is out of date.

What the Equalisation Levy was

India introduced the Equalisation Levy in 2016 to tax digital revenues earned by foreign companies with no physical presence in India:

• 6% on online advertising (the original “Google Tax”) — applied to payments by Indian businesses to non-resident companies for digital ad space and related services.
• 2% on e-commerce supply/services — added in 2020, applied to revenues of foreign e-commerce operators from Indian users.

Both were gross-revenue levies, charged outside the normal income-tax system, introduced as interim measures while global digital-tax rules were negotiated.

Why it’s gone

India withdrew the levy in two steps:

• 2% e-commerce levy → abolished w.e.f. 1 August 2024.
• 6% advertising levy → abolished w.e.f. 1 April 2025.

With both removed, the Equalisation Levy no longer exists in Indian law for 2026.

What replaces it for foreign sellers

Nothing replaces it as a gross-revenue levy. Instead, two ordinary tax systems apply:

1. GST (consumption tax): if you sell digital services to Indian consumers, you fall under OIDAR — register and charge 18% IGST on B2C sales (no threshold). See the OIDAR guide.
2. Income tax (on profits): a Significant Economic Presence (₹2 crore India revenue or 3 lakh users) can create a taxable business connection under Section 9(8)(d) of the Income-tax Act 2025 — but a tax treaty (DTAA) usually protects sellers with no permanent establishment in India.

So the practical shift for a foreign digital seller is: stop thinking about the Equalisation Levy, and make sure you’re GST/OIDAR-compliant instead.

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General information as of June 2026, not tax advice. BatchWise handles OIDAR registration + monthly filing for foreign sellers.