Google Tax, Amazon Tax and Facebook Tax: A New Tax In India
Google Tax, Amazon Tax or Facebook Tax: A New Tax In India, All might not be aware about this, but in the current Union Budget of 2016, Finance Minister has proposed to levy a totally different and unique tax in India which is basically known as Google Tax.
Google Tax, Amazon Tax and Facebook Tax
What is Google Tax ?
Which services are included in it ?All the services which are performed online such as online advertising, distributing digital content, downloading videos or music, downloading e-books or PDFs, e-commerce transactions, online new reading, online search engine, online maps, online software applications. It should rather be noted that this is just and illustrative list and the ambit of this tax would be increased further.
Why such Tax ?It is but obvious that the question will come in your mind that what is the need for levying such tax; the only reason to levy such tax is to bring the big companies like Google or Facebook under the ambit of Law. These companies are earning huge income by way of advertisements and other sources but are not paying single tax as they have routed the income through tax haven countries.
Analysis or Effect of Google Tax:There should be question in mind that how the Google Tax would be calculated. There are two alternatives available. Any of the two can be adopted.
- If the services rendered by the foreign entity amounted to Rs. 5,00,000. Then the Google Tax on that amount would be Rs. 30,000 (Rs. 5,00,000 * 6%). Now the remaining amount of Rs. 4,70,000 should be paid to the foreign entity. Here the foreign entity has to bare loss of Rs. 30,000.
- If the foreign entity is not ready to bare the loss of Rs. 30,000, than the individual has to bare such amount. So the Indian citizen would be paying Rs. 5,00,000 to foreign entity and Rs. 30,000.
Consequences of not deducting or depositing: