The Indian Government has announced its intention to charge a 6 % equalisation levy on overseas companies such as Google and Facebook to ensure they pay for the revenue obtained from local advertisers . Indian Finance Minister , Arun Jaitley , said in his maiden speech this week that revenue of over Rs 1 lakh p.a . for online advertising to “ foreign e - commerce companies ” without permanent establishments in India would attract the levy . As multinational digital platforms are not permanently based in the country , which would make them liable to pay tax in India , and they can not be double - taxed , the government has resorted to indirect methods of deriving some monetary compensation from these platforms ’ profits . Though the minister mentioned ecommerce companies in his speech, the levy is likely to cover “payments to large ad exchanges as well as ecommerce companies that are located outside India, as these are the entities that are heavily involved in online advertising”, said Chetan Nagendra of law firm AZB & Partners. However , small Indian companies and foreign start - ups may feel the greatest impact from this tax .
The Indian Government has announced its intention to charge a 6 % equalisation levy on overseas companies such as Google and Facebook to ensure they pay for the revenue obtained from local advertisers . Indian Finance Minister , Arun Jaitley , said in his maiden speech this week that revenue of over Rs 1 lakh p.a . for online advertising to “ foreign e - commerce companies ” without permanent establishments in India would attract the levy . As multinational digital platforms are not permanently based in the country , which would make them liable to pay tax in India , and they can not be double - taxed , the government has resorted to indirect methods of deriving some monetary compensation from these platforms ’ profits . However , small Indian companies and foreign start - ups may feel the greatest impact from this tax .