The Government of India has decided to remove 6% tax on digital advertisement, also called Google Tax in other words, which will be applicable from 1 April 2025. This decision has been taken to reduce trade tension with the US and avoid potential counter -tariffs. This tax was applicable to foreign tech companies like Google, META, Amazon, giving the government a revenue of Rs 3,343 crore in FY 2024.

The Google Tax was implemented in 2016 and its scope was extended in 2020, making large foreign digital companies to pay additional taxes on earning revenue in India. America considered it a “discriminatory”, as Indian companies did not cost this tax. After this decision, advertising business of foreign tech companies in India is expected to be promoted.

From April 2, the US warned of business retaliation on countries levying digital tax. Earlier, during Prime Minister Narendra Modi’s visit to America, the two countries had set a trade deal by 2025 and a $ 500 billion by 2030 by 2030. In India these days, the US delegation led by USTR Brendon Lynch is negotiating, making this decision more important.

Toi’s UnderThe Government of India has also proposed to remove income tax exemption for some digital companies, which will try to resolve international tax disputes. This decision will help India to avoid potential American tariffs and can promote foreign investment in the tech industry.