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Google Clients with India Ads may have to pay Levy from Oct.

Google is all set to pass on India’s 2% equalization levy introduced in April 2020 to its clients whose advertisements are visible in India from October. The levy is applicable even in cases where both the buyer and seller are not based in India, if the advertisement is visible in India. The digital giant recently specified this to its clients and called India’s levy a “Jurisdiction specific surcharges.”

The government in 2020 expanded the scope of the equalization levy, initially imposed on cross-border digital transaction since 2016, in a bid to tax Internet giant’s digital advertising revenues from India to include any purchase by an Indian or India-based entity through an overseas ecommerce platform. “From 1st October 2021, we’ll be adding a surcharge to the invoices we send to non-Indian customers whose ads are viewed in India. The surcharge is to cover part of the costs associated with complying with the Indian Equalization Levy, which only impacts non-Indian advertisers. We will continue to pay all the taxes due in India and elsewhere,” a Google spokesperson said.

“There will be various situations where the recipient of service is not an Indian business, but if the advertisement is targeted at a user in India, then equalization levy will be applicable, Google’s interpretation is in line with the provisions of the law which covers certain specified circumstances where the levy would apply. This would add to the collections of the revenue department going forward,” said Ajay Rotti, partner, Dhruva Advisors.  S-ET  

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