‘Google tax’ could draw reprisal, US cautions India

New Delhi: India’s 6% equalisation levy on foreign online advertising platforms may impede its overseas trade and increase the risk of retaliation from countries where Indian companies are doing business, the US has cautioned. This is because its provisions do not provide credit for tax paid in other countries for the service provided in India, it said.

In its latest report on trade barriers, the US also marked a slew of issues in India’s digital trade including those proposed in the draft ecommerce policy, such as data localisation requirements, restrictions on cross-border data flows, expanded grounds for forced transfer of intellectual property and proprietary source code, and preferential treatment for domestic digital products. Washington said it “strongly encourages India to reconsider this draft policy”.