US objected to Google tax imposed in India
Technology : The US has raised objection to the Google levy equalization levy (Google Tax) in India. This is the second time America has objected to this. Earlier in June 2020, he had said that this tax was not allowed. The United States Trade Representative (USTR) says that US companies are being discriminated against with this tax. USTR acts as a trade policy for the US.
The USTR has also issued notices to several countries for tax scrutiny. This includes India, Austria, Brazil, European Union, Italy, Indonesia, Spain, Turkey and Britain. It has said that the US can increase taxes on items exported to these countries. In view of this situation, trade war between India and America can start.
What is the equalization levy or Google tax?
Many companies like Google, Facebook from India earn crores of rupees from advertising. Legislation was enacted from April 1, 2020 to bring them under the tax net. The scope of the equalization levy includes provisions related to the online and digital advertising space. Foreign companies that do more than Rs 2 crore business annually in India will have to pay 2% digital tax.
Google, Amazon, Facebook have complained
American companies like Google, Amazon and Facebook have complained to USTR about objecting to digital service tax. America says that with this tax, many companies like Google, Apple, Facebook, Amazon, Netflix, Uber, eBay, Zoom are being targeted. However, the income of these companies in India is billions of rupees.
Last year Google paid 604 crores of tax
According to USTR, more than 86 of its companies fall under the equalization levy. These are the highest compared to other countries. In such a situation, India is discriminating against these companies. Google paid Rs 550 crore during the financial year 2017-18 due to the equalization levy. At the same time, he has paid 604 crore rupees during 2019-20. That is, in two years it has given Rs 1154 crore.
Investigation under Trade Act of 1974
USTR is investigating India regarding digital service tax. The investigation has been named the section 301 investigation, as it will be investigated under section 301 of the Trade Act of 1974. This section empowers the US USTR to examine if a country's discriminatory attitude negatively impacts America's trade.
India needs to be intimidated by America's warning on the equalization levy. In a similar case, the US has imposed a 25% tax on certain items exported to France. France also increased Google tax on American companies. It is believed that Trump may take action against India, Italy and Turkey before he leaves his presidency. If this happens then many items coming from America will become expensive. This will have a direct impact on people's pockets.
Piyush Verma
I am a Blogger and Web Designer.
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