The government is now working on Equalization levy of 6% on all revenues made through the Internet and by Internet companies. An announcement regarding the same is going to be out very soon. An unnamed official claimed that Google Tax would be rolled out in the next few months.
The soul of this taxation makes the regular online activities like downloading games and software will be taxed. As a result, the burden will be shared among the users and makes the online activities more expensive.
As of earlier reports, Government has decided to impose Google tax back in December 2016. However, the rules and regulations on it were not decided then, and execution of the taxation was postponed.
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In the present scenario, no other country is imposing the tax on Internet-based revenues. Hence, this could be the reason for the delay in the frame work of this Google tax regime.
“It was earlier decided that by December this year the levy would be applicable on applications (apps) bought on platforms like Google or Apple. However, due to other regulatory changes, equalization levy was postponed for the budget,” says the official.
Tech giants like Google, Netflix, Amazon, Flipkart, Apple and all such service oriented or product selling companies come under this category. On the other hand, there are reports saying that this taxation will only be imposed on the Business to Business transactions
Also Read: Users should Pay 15% Service Tax for Downloading Music, e-books from Foreign Sites
As of now, this Equalization levy is only imposed on revenues generated by online advertisements. And only few companies like Facebook, Google, Twitter, Linked, etc. are covered under this tax. If this Google tax is imposed on all the companies, it may affect the entire Digital India mission negatively.
Below are the 13 categories listed under the Google Tax, and forced to pay 6% tax:
- Designing, developing websites for clients (domestic and international)
- Digital advertisements
- Digital tools/software used for TV/Radio advertisements
- Websites which provide space for advertisements
- Emails which are sent/received for commercial activities
- Online content used for commercial purposes or recreational purposes wherein digital advertisement can be implemented
- Online computing, blogging, online data or any activity related to digital medium
- Any provision/service used for uploading, sharing, storing or distributing digital content
- Downloading music/videos
- Downloading games and software/tools from the Internet
- Facilities for collecting online payments/wallets