India undeterred by the US investigation into its tax on digital transactions
Published On: Friday, June 5, 2020 | By: Team KnowMyStock
India is undeterred by the US launching an investigation into its tax on digital transactions, or equalisation levy, covering companies such as Netflix and Amazon, government officials said. The government expects many other countries to adopt the same position, they said. Australia and New Zealand have already proposed digital taxes and more countries are likely to follow suit, disappointed with the progress on the framework for this at the Organisation for Economic Cooperation and Development (OECD). The US had on Tuesday initiated investigations into 10 nations and blocs including India that have imposed such taxes or are in the process of doing so. They include the UK, Brazil, and the European Union.
The 2% , or so-called Google tax, came into effect from April 1 and the first payment deadline is July 7. The government had earlier imposed a 6% levy on digital advertising. This is aimed at taxing digital companies based overseas on the business they do in India.
The Central Board of Direct Taxes, which has specified jurisdictional authorities for the equalisation levy, will soon notify the relevant form for payment in line with the deadline. Besides, the levy does not single out country and applies uniformly.
Trade experts said India is well within its rights to impose the equalisation levy and will be able to muster a strong defence.
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