Home Tech Companies like Facebook and Google to pay more than 2 crores and 3 lakh users will have to pay digital tax, new rule came

Companies like Facebook and Google to pay more than 2 crores and 3 lakh users will have to pay digital tax, new rule came

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Companies like Facebook and Google to pay more than 2 crores and 3 lakh users will have to pay digital tax, new rule came

Other foreign digital companies including Facebook, Google, Alibaba, Netflix and Amazon will have to pay digital tax from April 1, 2022.

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In spite of lack of physical presence in India, companies earning from Indian customers will now have to pay tax. Under this, other foreign digital companies including Facebook, Google, Alibaba, Netflix and Amazon will have to pay digital tax. This has been done because these companies earn a large number of users in India by offering their service or goods.

It is a part of the Significant Economic Presence (SEP) principal, which was introduced in the Finance Bill of 2018-19, and includes the provision for the download of data or software on the total payment from such transactions. ‘ The scope of ‘Business Connection’ was extended. Under this, the provision of digital tax was brought for earning more than a specified amount or for doing business with more users. Under this, all companies will be taxed from 1 April 2022.

However the existing double taxation avoidance agreement will not be covered under the proposed change. This means that India will need to create tact treaty with America again to collect such tax from Facebook, Google. Digital companies will come under the tax net of India only when the existing treaty is reviewed or when new agreements are signed.

CBDT levied digital tax on these companies and said that those companies of the bar which generate more than 2 crore revenue annually through excise or property transactions in India, will have to pay digital tax. This would also include downloading of data or software. Along with this, it was also said that companies which do business with more than three lakh consumers in India will also be kept under the ambit of digital tax and they will have to pay tax.

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