Google tax accounts for only 1% of direct tax collection in major cities: Report

Google tax, or equalisation levy, has accounted for only 1 percent of direct tax collection from major Indian cities, so far, in FY21.

Bengaluru recorded Google tax collection of Rs 176.9 crore this financial year till August 20, which was only 0.57 percent of overall direct tax collection from the city, Business Standard reported citing Income Tax Department data.

Hyderabad's equalisation levy (Rs 118.3 crore) during the period was only 1.1 percent of total direct tax receipts, the report said

Moneycontrol could not independently verify the story.

Delhi and Mumbai recorded a combine equalisation levy collection of only Rs 87 crore as of August 20 this fiscal year, the report said. Total nationwide Google tax collection in FY21 ,so far, has been Rs 396 crore, lower than Rs 407 crore in the previous year.

Introduced in 2016, the equalisation levy initially applied to revenue from online advertisements. The rules were revised in February 2020 to include transactions made by non-resident ecommerce companies.

From April 1, 2020, companies such as Google, Facebook, LinkedIn, Udemy, Alibaba, eBay and Uber are required to pay a 2 percent equalisation levy. The companies are awaiting clarity from the Indian government on certain aspects of the levy.