The Government of India has proposed to remove 6% Google Tax (Ecqualization Levi) to be levied on online advertising services of companies like Google and Mata from April 1.This tax is widely known as Google Tax. The aim of this move of the Government of India is probably to calm US President Donald Trump, who has threatened to impose counter -tariffs on countries levying digital taxes on American tech companies since April 2.
Let us tell you here what the government has proposed? After all, what is Google Tax? How much does the government earn from it?
What has the government proposed on Google Tax?
The government has proposed to abolish the ecology levy or digital tax on online advertisements under 59 amendments in the Finance Bill 2025 on Monday, 24 March. Right now the bill is being debated in the Lok Sabha. If the proposal is approved by Parliament, Google Tax will not be applicable from April 1, 2025.
The removal of Google Tax is expected to benefit from online advertising services, especially prominent American take giant companies like Google and Meta.
What is Google Tax?
Ecqualization Levi or Google Tax was started in 2016 in India. The aim was to tax the income of foreign e-commerce companies from India. Google Tax is a tax, which is levied by the recipient of service at the time of payment. The condition is that the company which is being given tax in lieu of advertisement should be foreign. The Finance Act, 2020 had increased the scope of this tax on or after 2% to e-commerce supply and services made on April 1, 2020. However, it was abolished from August 2024 in the Union Budget presented in July 2024.
How much does the government earn from it?
In 2021, the government had stated in a written reply in the Rajya Sabha that Rs 338.6 crore was deposited in 2016-17, Rs 589.4 crore in 2017-18 and Rs 938.9 crore in 2018-19. The collection in 2019-20 was Rs 1,136.5 crore and Rs 1,492.7 crore in 2020-21 (30 January).
If we talk after this, according to the Economic Times report, the total figure in 2020-21 stood at Rs 2,058 crore, Rs 3,900 crore in 2021-22, Rs 3864 crore in 2022-23, Rs 3533 crore in 2023-24 and Rs 3,342 crore in 2024-25 (15 March).