Google Tax: Government re-thinking equalisation levy

MUMBAI: The government is exploring changes to the equalisation levy, and may stop charging the tax on digital transactions either partially or in its entirety for a year as it works on the options, people with direct knowledge of the matter said.

The government is doing a cost-benefit analysis and has reached out to stakeholders to figure out if it needs to suspend or shelve the 2% equalisation levy imposed this fiscal year on any purchase by an Indian or India-based entity through an overseas ecommerce platform, they said.

Many Indian startups and stakeholders are also pushing to shelve or reduce the 6% equalisation levy, the so-called Google tax, charged on the advertising revenue that overseas companies such as Google, Facebook and Netflix generate from India.