American multinational Google Inc today submitted to Delhi High Court that it is not liable to pay any taxes in India for its internet activities, as it is not providing any taxable services or earning income from here nor does it have a permanent establishment in the country.
The submission has been made in an affidavit filed by the website in the High Court which is hearing a plea by a former BJP leader seeking protection of children from online abuse and recovery of taxes from the websites on their income from operations in India.
The website's claim has been opposed by the petitioner, K N Govindacharya, who in his affidavit has contended that sites like Facebook Inc and Google Inc are liable to pay taxes as they generate huge revenue through agreements with Indian advertisers as well as sale of games and applications to internet users here.
The case is slated to be heard tomorrow by a bench headed by Justice B D Ahmed.
Google Inc. Has contended in its affidavit that it "is not providing any taxable services in India, neither has a permanent establishment in India nor is it earning any income which is arising from or accruing in or deemed to be arising or accruing from India.
"Furthermore, Google Inc is not receiving any payment in the nature of 'royalty' which may be taxable either under the relevant Indian laws or under the Double taxation Avoidance Agreement between India and USA." In his affidavit filed through advocate Virag Gupta, Govindacharya has alleged that the website has "incorrectly" submitted before the court that no tax is payable by them in India.
Govindacharya has also alleged that the Tax department has "failed to initiate penal provisions" or "demanded the outstanding taxes for previous year(s)" from the websites "which has caused irreparable loss to the Indian economy and exchequer".