The government on Tuesday announced withdrawal of the 2 per cent equalisation levy or digital tax on overseas e-commerce supplies.
The government on Monday clarified that transactions involving royalty/ technical services fee would be taxable under income-tax and not be liable for equalisation levy that is paid by foreign companies for conducting business with Indian parties, while explaining what would construe online sale of goods or services.
India conceding ground to bring only top 100 digital companies like Google, Facebook, and Netflix into the global taxation pact may have revenue implications. This will mean that New Delhi will have to withdraw the contentious 2 per cent equalisation levy on e-commerce operators by 2023. This may have revenue implications for India, experts pointed out, as the equalisation levy has a much lower annual revenue threshold of Rs 2 crore (euro 0.2 million) as against euro 20 billion agreed by 130 countries at the Organization for Economic Cooperation and Development (OECD). India, along with other developing countries, was pitching for at least euro 1 billion threshold to cover at least 5,000 global entities. India collected Rs 2,057 crore from the equalisation levy in 2020-21, an 85 per cent growth over Rs 1,136 crore in the previous fiscal.
Finance Minister Nirmala Sitharaman announced that the Goods and Services Tax (GST) Council's October 7 meeting will focus on 'GST 2.0' process reforms, including e-invoicing and input tax credit rules, while also addressing complex issues surrounding the taxation of the digital economy and cryptocurrency.
'Amazon, Meta, Google, Microsoft have large operations in India and rely on smooth trade and data flows.' 'Restrictions could raise their costs, limit AI chip exports, and complicate their India strategies.'
India is seeking either an exemption or a longer timeline on the pharmaceutical tariffs, expected to kick in by July 31.
The US Trade Representative's (USTR) office will also conduct the Section 301 probe against nine others, including Austria, Brazil, Indonesia, Italy, Spain, Turkey, the Czech Republic, the UK, and the EU, for levying or considering digital services taxes "discriminating against US companies".
The government on Wednesday launched Rs 4,531 crore market access support (MAS) intervention scheme for a six-year period (FY26-31) to improve global reach, visibility and competitiveness of Indian exporters through 'structured and outcome-oriented' interventions.
Net direct tax collection grew 18.3 per cent to about Rs 11.25 lakh crore as of October 10 this fiscal, government data showed on Friday. The mop-up includes personal income tax collection of Rs 5.98 lakh crore and corporate tax collection of Rs 4.94 lakh crore.
In a bid to provide a level playing field, the government has decided not to levy 2 per cent digital service tax if goods and services are sold through Indian arm of foreign e-commerce players.
E-commerce companies that fall within the scope of the equalisation levy include Adobe, Uber, Udemy, Zoom.us, Expedia, Alibaba, Ikea, LinkedIn, Spotify, and eBay.
New Delhi and Washington have agreed to count the benefits of a global agreement on taxation from the next financial year. However, the benefits would actually accrue once the global pact comes into effect or March 31, 2024, whichever is earlier, in the form of credit.
The deal fell through over unresolved disagreements over contentious issues, mainly on agriculture and automotive sector tariffs.
The central government's clarification on the 2 per cent equalisation levy on foreign digital operators in the Budget, which considerably expands the scope of the levy, might be challenged in court, with several companies contemplating filing a writ petition in the coming few weeks. The writs might be filed on the grounds of the levy's alleged extra-territorial overreach, as it aims to cover those entities that do not have a physical presence in India, going against international taxation rules.
Digital commerce operators advertising on global social media, which earlier did not pay Google tax on their operations in Jammu & Kashmir, may now have to cough it up at 6 per cent.
The government said that far from targeting any US entity, the purpose was to ensure fairness, healthy competition, and to exercise the ability of governments to tax businesses having a nexus with the Indian market through digital operations.
India and the visiting US officials have decided to hold a wrap-up session on Saturday morning to conclude the three-day talks on the proposed bilateral trade agreement, government sources said. They said the discussions are at a "very" early stage.
The US on Wednesday announced tariffs on six countries, including India, that have imposed or are considering equalisation levy/digital services tax on e-commerce companies but immediately suspended the taxes for up to six months to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and G20. United States Trade Representative (USTR) Katherine Tai, in a statement, announced the conclusion of the one-year Section 301 investigations of Digital Service Taxes (DSTs) adopted by Austria, India, Italy, Spain, Turkey and the UK. "The final determination in those investigations is to impose additional tariffs on certain goods from these countries, while suspending the tariffs for up to 180 days to provide additional time to complete the ongoing multilateral negotiations on international taxation at the OECD and in the G20 process," the statement said.
Union Finance Minister Nirmala Sitharaman, along with her team of bureaucrats, delved into the fine print of the 2024-25 Budget documents in a press conference, detailing the government's road map on bringing down the debt-to-GDP ratio and bold tax measures.
Downloading songs, movies, books? You may have to pay tax on it.
The group has called for a retaliatory tariff action against India, if New Delhi does not roll back the 'unilateral and discriminatory' equalisation levy or Google Tax.
A total of Rs 396 crore has been mopped up, as on August 20 against Rs 407 crore collected in the same period last year. This was despite the expansion of the levy to online e-commerce players from this financial year.
E-commerce giants such as Amazon, Netflix and Flipkart, whose headquarters are not in India, potentially have to pay the additional levy of 2 per cent from April 1.
Any company resident in a country has to pay both indirect taxes as well as Income Tax.
Court cases likely over interpretation of the new levy proposed in the Budget for digital economy.
The US launched an investigation, focusing on whether the tax in India and other countries discriminated against American companies, were retroactive, and reflected unreasonable tax policy.
Manchester City and Chelsea both secured their Champions League places with victories on the final day of the English Premier League season and Newcastle United joined them despite stumbling to a last-day defeat.
Brazil's Fluminense continued their fairy-tale run at the Club World Cup with a 2-1 victory over Saudi Arabia's Al-Hilal on Friday in Orlando, Florida, to book their place in the semi-finals.
Currently, companies are taxed in the jurisdictions in which they have a physical presence. However, digital businesses generate revenues from markets without a significant physical presence in a country.
There's no change in Apple Inc's India strategy, said a top government source. 'It can only be enhanced'.
Taxmen have come across instances where global firms - charged a withholding tax of 6 per cent - are underreporting the exact income they earned from an Indian user.
The income tax department on Monday released rules for equalisation levy - a tax on online advertisements that would come into effect from June 1.
The proposed exemption in customs duty on import of lithium, cobalt and other rare minerals in the Union Budget 2024-25 is likely to lower the battery production cost and help in making electric vehicles more affordable for the buyers, auto industry leaders said on Tuesday.
IMAGES from the Premier League matches played on Sunday.
A deflected late strike from Lisandro Martinez earned Manchester United a much-needed 1-0 victory at Fulham in the Premier League on Sunday.
Chelsea won for the first time in six Premier League matches when they beat relegation-threatened Wolverhampton Wanderers 3-1 at home on Monday.
United manager Ruben Amorim's tough start to life at Old Trafford continues though and the Portuguese has now lost eight of the 14 Premier League matches since he took charge.
Chelsea recovered to beat West Ham United 2-1 to jump to fourth place in the English Premier League on Monday.
The government on Tuesday raised the deposit threshold limit to Rs 5 lakh per annum in provident fund for which interest would continue to be tax-exempt.
A round-up of Tuesday's action in the Premier League.
