Centre mulls 'digital tax' on foreign platforms selling, streaming to Indian IP address

After introducing a new 'optional' tax regime, Centre is mulling on introducing a new digital tax, state reports on Friday. Introducing a provision to tax any overseas platform advertising, selling or streaming goods to an Indian IP address, government is reportedly taking a step towards a global digital tax. new digital tax will reportedly be levied onec Organisation for Ecomic Cooperation and Development (OECD) framework is finalised.

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India mulls 'digital tax'

Experts state that once new tax bill is passed, Centre will be able to tax revenue of e-commerce firms such as Amazon, Alibaba and eBay which sell goods or services based on data collected from its users apart from streaming giants like Amazon, Netflix. Moreover, firms like Facebook and Google which host targetted advertisements and monetize data using cookies will also be taxed. India had levied a 6% equalization tax also referred too as 'Google tax' in 2016.

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Revisions to Income-tax Act

above-mentioned changes are among or changes to be introduced in Finance Bill, as per reports. Finance Bill reportedly proposes to add new source rules which will classify certain types of income of a foreign firm operating in India to be of Indian origin - making it taxable in India. This move is allegedly proposed to be on par with evolving digital ecomy throughout world.

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Piyush Goyal's Amazon snub

This development comes weeks after Union Commerce Minister Piyush Goyal, during Raisina Dialogue 2020 held in New Delhi, had said that Amazon is t doing a favour to India by investing a billion dollars in country. However, later he said that his statement was misinterpreted and clarified that government welcomes all investments but it should adhere to rules and regulations while adding that se investments should t hamper small traders by creating unfair competition. Currently, Competition Commission of India (CCI) has ordered a probe into alleged competition law violations by Amazon and Walmart-owned Flipkart.

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