Google to pass on 'Google tax' from October

Google tax, equalisation levy, surcharge, ADS, Advertisement, google, Tax, India, 2 percent, first wrote

Google is all set to pass on India’s 2% equalisation levy introduced in April 2020 to its clients whose advertisements are visible in India from October. The levy is applicable even in cases where both the buyer and the seller are not based in India, if the advertisement is visible in India.

The digital giant recently specified this to its clients and called India’s levy a “jurisdiction specific surcharges.”

The government in 2020 expanded the scope of the equalisation levy, initially imposed on cross-border digital transactions since 2016, in a bid to tax Internet giants’ digital advertising revenues from India to include any purchase by an Indian or India-based entity through an overseas ecommerce platform.

“From 1st October 2021, we’ll be adding a surcharge to the invoices we send to non-Indian customers whose ads are viewed in India. The surcharge is to cover part of the costs associated with complying with the Indian Equalisation Levy, which only impacts non-Indian advertisers. We will continue to pay all the taxes due in India and elsewhere,” a Google spokesperson said, responding to an ET query.

“There will be various situations where the recipient of service is not an Indian business, but if the advertisement is targeted at a user in India, then equalisation levy will be applicable. Google’s interpretation is in line with the provisions of the law which covers certain specified circumstances where the levy would apply. This would add to the collections of the revenue department going forward.” said Ajay Rotti, partner, Dhruva Advisors.

The new regulations define online sale of goods or services as any purchase that has been made online, online payment or even an offer that has been accepted online that covers every transaction. The 2% tax can be applied even in cases where only a small part of a transaction was carried out online with the rest happening offline.

As India broadened the scope of equalisation levy without clarifying what exactly it means by e-commerce or online, it was widely seen as creating problems for several Indian subsidiaries of multinationals. Now, many firms fear that all kinds of transactions including hotel bookings, software purchase and even buying certain components from overseas could come under the gamut of the levy, ET first wrote on February 3.

Legal experts said that the way the law is worded, even ERP (enterprise resource planning) systems—the internal software systems several companies use—could technically be considered an online platform and attract the levy.

Google’s interpretation is also set to impact several other companies too, tax experts said.

ET had first written on October 31 last year that Apple is passing on the 2% equalisation levy, aside from 18% goods and services tax (GST), to Indian consumers who buy apps or any other product from its iTunes or App store. This was basically on tax on the purchase of any apps from Apple iTunes.

Most large digital players have been collecting this from their customers in the last one year.

What Google is now looking to do is take a step forward. Even in cases where neither the buyer nor the seller is Indian, tax will be applicable if the advertisement is visible in India. Tax experts say that because Google has taken this stand, it is only going to complicate matters further for other MNCs operating in India.

For instance, if an Australian citizen visiting a hotel in New Delhi buys something from Google app store while using hotel wifi, this too would attract the equalisation levy.

“The way the equalisation levy law is worded, almost every transaction that happens on the internet could potentially face the tax. Also, many companies are relooking at their existing structures to see if they can park the India specific activity in a separate domestic entity to avoid complications around equalisation levy,” a senior lawyer advising one of the big four tech companies, told ET.

Several companies have created holding entities in tax havens where most profits are accumulated or where intellectual properties are housed because tax rates in these jurisdictions are close to nil, saving taxes on the total income.

News Related

OTHER NEWS

Major update from Telegram: Allows recording of video/audio from live chats

At a time when it is under fire for being the ‘playground for cybercriminals’, Telegram has rolled out a slew of updates on its platform including the major feature to ... Read more »

Next Pro iPhone may finally give up on this feature

NEW DELHI: Apple recently unveiled its iPhone 13 series. The four new iPhones will go on sale this week, but speculations about Apple’s future phones have already started doing rounds ... Read more »

iPhone users, reasons why you could wait to install Apple iOS 15

NEW DELHI: Apple unveiled its iPhone 13 series, Apple Watch Series 7 and new iPads last week (September 14) at its California Streaming event. At the same event, the company ... Read more »

HMD Global announces launch event on October 6, may bring Nokia G50 5G, T20 tablet and other devices

HMD Global has announced it will host an event on October 6. Nokia has not revealed the name of smartphones that will be launched at the event. But rumours say ... Read more »

High Court ruling fails to lift EaseMyTrip shares; stock tanks 13% in 2 sessions

NEW DELHI: Shares of Easy Trip Planners, which runs EaseMyTrip , continued to tank on Tuesday despite a Delhi High Court order seeking clarification on BSE’s action to put the ... Read more »

HDFC launches festive offer; home loan at 6.7 pc

Country’s biggest mortgage lender HDFC on Tuesday announced a festive offer in line with peers like SBI with home loans starting from 6.70 per cent. Last week, SBI as part ... Read more »

Backstabber Sharad Pawar can't be our guru; MVA govt just adjustment: Shiv Sena leader

File image Former Union minister and Shiv Sena leader Anant Geete has said NCP chief Sharad Pawar who had “backstabbed” Congress to form his party cannot be a “guru” for ... Read more »

Why are BMW and Daimler being sued over climate change?

German activists have filed a lawsuit against automakers BMW and Daimler for refusing to tighten carbon emissions goals, the first time German citizens have sued private companies for exacerbating climate ... Read more »

Astrological incompatibility can't be an excuse to go back on marriage promise: HC

The Bombay High Court refused to discharge a 32-year-old man from a rape and cheating case noting that he had used “astrological incompatibility” of horoscopes as an excuse to resile ... Read more »

Dancing, starry dwarf and narrow-mouthed: new species make India a frog paradise

It is barely the size of a thumbnail, so it may not come as a surprise that it took so long to spot the starry dwarf frog. It was discovered ... Read more »

HMD Global event announced for October 6

HMD Global have scheduled an event for October 6 HMD Global – the caretakers of the Nokia brand – have announced an event scheduled for October 6. The company share ... Read more »

Vaccine winners: Stocks that benefit from India's rapid inoculation drive

MUMBAI: India’s vaccination drive has been smashing records off late after the country inoculated more than 20 million individuals on Sunday. The status of the vaccination drive is a far ... Read more »

This Shark hair dryer is a game-changer for curly hair

Blow drying your hair is something many of us do on a regular basis, and on the surface appears to be a relatively easy task. All you have to do ... Read more »

Joan 6 Pro makes booking a meeting room a breeze

As people return to the office and start to wrestle once again with booking meeting rooms and boardrooms, an updated solution to an existing market-leading device is on the horizon. ... Read more »

Cambodia: Students create prototype manned drone

With eight propellers and using a school chair for the pilot's seat, the drone was developed at the National Polytechnic Institute of Cambodia. Read more »

MLBB to host anniversary gala, month-long giveaway for 5th anniversary

(Photo: Moonton Games) Mobile Legends: Bang Bang (MLBB) developer Moonton Games announced on Tuesday (21 September) that they will be hosting an online gala to celebrate the game's fifth anniversary ... Read more »

What's next for OnePlus? - OxygenOS and ColorOS teams become one

When OnePlus announced its product and R&D teams’ merger with Oppo’s back in June, there was speculation that OnePlus potentially switching from OxygenOS to ColorOS (the Android overlay used by ... Read more »

Post-IPO Robinhood wants to dive into cryptocurrencies

After its IPO in July, trading platform Robinhood is now said to be planning to load up its app with new features like a cryptocurrency wallet. According to a report ... Read more »

Robinhood testing crypto wallet, cryptocurrency transfer features: Report

Robinhood Markets Inc is testing new crypto wallet and cryptocurrency transfer features for its app which would allow customers to send and receive digital currencies such as bitcoin, Bloomberg News ... Read more »

US states rally around proposed laws to rein in Big Tech

A bipartisan group of U.S. state attorneys general sent a letter to lawmakers on Monday urging them to pass a series of bills that tighten antitrust laws aimed at Big ... Read more »

In 2020, Noida saw most cases of cyber frauds in the state

At 1,585, Gautam Budh Nagar has seen the highest number of cybercrimes in the state in 2020, when a majority of people confined to homes because of the lockdown shifted ... Read more »

Sebi drops adjudication proceedings against RIL in alleged incorrect financial disclosures matter

NEW DELHI: Markets watchdog Sebi has disposed of adjudication proceedings without imposing any penalty on Reliance Industries Ltd in a matter related to alleged incorrect disclosure of diluted earnings per ... Read more »

SBI Cards tanks 6% as Carlyle arm sells stake worth Rs 3,267 crore

New Delhi: Shares of SBI Cards & Payment Services tanked 6 per cent in early trade on Tuesday as Carlyle Group sold its stake worth Rs 3,267 crore in the ... Read more »

Ride-hailing giant Didi Chuxing denies executive Jean Liu is leaving amid Beijing's ongoing cybersecurity probe

Chinese ride-hailing giant Didi Chuxing denied a Reuters report that its co-founder and president Jean Liu was on her way out and threatened legal action to fight the “malicious” spreading ... Read more »

Za ten podatek Polacy znienawidzą Polski Ład. Wszyscy bez wyjątku, nie tylko przedsiębiorcy

© Provided by Spider’s Web Wojna o podniesienie akcyzy na piwo od dawna toczy się pomiędzy branżą piwowarską a spirytusową. I wygląda na to, że ci od wódki mogą ją ... Read more »

Own multiple houses? Here's how you should file your income tax return

If you own many houses, then the ‘self occupied property‘ benefit is granted only to two properties as selected by you. The other property/properties are treated as ‘deemed to be ... Read more »

Bitcoin, Ethereum slump as market selloff widens

Cryptocurrency prices sank on Monday as concerns over the spillover risk to the global economy from Chinese property group Evergrande’s troubles spread across financial markets. Bitcoin, the world’s biggest and ... Read more »

COVID-19: Lowest number of active cases witnessed in last 184 days

New 26,115 cases of coronavirus infection were added to India’s total count of 3,35,04,534 so far. The active cases declined to 3,09,575, the lowest number to be witnessed in 184 ... Read more »

Raj Kundra expected to walk out of jail today after bail by Mumbai court in porn case

Businessman and actor Shilpa Shetty’s husband Raj Kundra along with his associate Ryan Thorpe is expected to walk out from the jail on Tuesday morning, a day after he was ... Read more »

JP Morgan Chase launches new digital bank brand in the UK

A new digital bank brand offering cashback and money management features has been launched in the UK by JP Morgan Chase. The Chase brand already provides a range of financial ... Read more »

Ahmedabad bans unvaccinated people from public transport, other places: Check details

(Image: Reuters) In a bid to encourage more and more people to get vaccinated against COVID-19, Ahmedabad Municipal Corporation in Gujarat has mandated that people be inoculated with at least ... Read more »

Coronavirus Update: India reports 26,115 new COVID-19 cases, 252 deaths

On the 248th day of the COVID-19 vaccination drive, 57.11 lakh beneficiaries received their first shot and 39.35 lakh their second dose. (Representative image: Reuters) India added 26,115 new cases ... Read more »

Canada election 2021 live results: Liberals projected to win most seats, will form minority government -- just like last time

Canada's unprecedented COVID-19 pandemic election was never going to be easy. The 36-day whirlwind campaign kicked off with many Canadians asking why they were even heading to the polls during ... Read more »

India's largest private lender, HDFC Bank, plots path to double retail loans

HDFC Bank, India’s largest private lender, plans to double the amount of loans it makes to retail borrowers over the next couple years as consumer demand ramps up from a ... Read more »

Best Apple iPhone 13 cases, chargers and cables

Apple recently released the latest set of phones — the iPhone 13-series. Many of you must be planning to upgrade to the latest series and no matter what kind of ... Read more »

Nestle India increasing number of female employees; 42% of new hires in 2020 were women

FMCG major Nestle India is increasing the number of its women employees as part of its gender diversity efforts. Presently, around 23 percent of Nestle India’s workforce are women, its ... Read more »

COVID-19 Vaccine Tracker: Over 96.46 lakh doses on September 20

On the 248th day of the COVID-19 vaccination drive, 57.11 lakh beneficiaries received their first shot and 39.35 lakh their second dose. (Representative image: Reuters) More than 96.46 lakh COVID-19 ... Read more »

Gabby Petito case becomes point of interest for internet sleuths on social media

The extensive reach of social media has become a focal point in the disappearance of travel blogger Gabby Petito. Petito had been traveling cross-country with her boyfriend, Brian Laundrie, in ... Read more »

88% of Nifty50 stocks trade above 200-DMAs. Here's what they hint at

NEW DELHI: As many as 44 of the 50 Nifty stocks traded above their 200-day simple moving averages (SMAs) on Monday. For a similar number of stocks, their 50-day SMAs ... Read more »

Investors grappling with Evergrande fallout weigh risk of wider pain

NEW YORK: Investors unnerved by the fallout from heavily indebted Chinese real estate company Evergrande were gauging the potential for a wider shakeout after a selloff hit stocks around the ... Read more »