---
title: "Equalisation Levy: India's Digital Tax | Model Diplomat"
description: "The Equalisation Levy is a tax on non-resident digital companies providing online services to Indian users, crucial for regulating digital commerce in India."
url: "https://modeldiplomat.com/learn/glossary/equalisation-levy"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- India's Equalisation Levy is a direct tax imposed on consideration received by non-resident digital companies for specified online services and e-commerce supplies to Indian users.
- Why was the Equalisation Levy drafted outside the Income-tax Act, 1961?
- What is the difference between the 2016 and 2020 versions of the levy?
- Has India repealed the Equalisation Levy?
- How does the Equalisation Levy differ from GST on digital services?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

India's Equalisation Levy is a direct tax imposed on consideration received by non-resident digital companies for specified online services and e-commerce supplies to Indian users.

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## Timeline

1. 1 April 2020

   The 2020 measure took effect on with no advance consultation, surprising affected firms.

2. 1 August 2024

   India accordingly abolished the 2 percent e-commerce levy with effect from through the Finance Act, 2024, and removed the 6 percent advertising levy with ef…

3. 1 April 2025

   India accordingly abolished the 2 percent e-commerce levy with effect from 1 August 2024 through the Finance Act, 2024, and removed the 6 percent advertising…

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In June 2020, the U.S. Trade Representative opened a Section 301 investigation into India's 2 percent Equalisation Levy on e-commerce operators, finding it discriminated against firms such as Amazon and Google.

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