Keep ‘Google tax’ on e-commerce companies in abeyance for now: Industry bodies

A coalition of nine industry and trade bodies have written to Finance Minister Nirmala Sitharaman to delay the implementation of the ‘equalization levy’ on e-commerce companies by at least nine months.

These are: Allied for Startups, the Asia Internet Coalition (AIC), the Asia-Pacific MSME Trade Coalition (AMTC), the Australian Services Roundtable (ASR), DIGITALEUROPE, the Information Technology Industry Council (ITI), the Japan Electronics and Information Technology Industries Association (JEITA), the US Chamber of Commerce and the US-India Business Council (USIBC).

The levy, first introduced in 2016-17, is often referred to as ‘Google tax’ and was applied on payments for digital advertisement services received by non-resident companies without a permanent establishment (PE) here, if these exceeded ₹1 lakh a year. The companies using these services are required to withhold the tax amount.