Government sees 59% rise in tax collection from online advertising platforms

The tax department collected Rs 939 cr in the year to 31 March, compared to Rs 590 cr last year

by exchange4media Staff
Published - Sep 9, 2019 2:56 PM Updated: Sep 9, 2019 2:58 PM
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According to news reports, the tax department clocked a collection of ₹939 crores from a levy on payments made to digital advertising platforms such as Google and Facebook from Indian entities in the year to 31 March, up from ₹590 crore- a 59% rise as compared to last year. As per reports, the jump in tax collections underlines that Indian entities paid digital platforms at least ₹15,650 crore for advertisement placements compared to ₹9,800 crore spent in the previous year.

Reports also suggest that the actual spending by Indian entities may be higher than what the tax collection numbers show since advertisers need to deduct the tax at source and deposit it with the Indian government on behalf of the offshore digital company only if the advertiser has spent more than ₹1 lakh on advertising on overseas platforms in the previous year.

Introduced in 2016, the equalisation levy which is currently set at 6% of the amount paid, is a tax deducted at source on payments to offshore digital firms such as mobile phone apps, social media platforms and digital content streaming services with a customer base in India.

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