You are here: Home » Economy & Policy » News
Business Standard

Tax foreign tech giants operating in India, say RSS ideologues, Gandhian

The letter said tech giants such as Google, WhatsApp, YouTube, Facebook, TikTok, and Amazon generated more than Rs 30 trillion from their Indian operations

Neha Alawadhi  |  New Delhi 

K N Govindacharya
K N Govindacharya

Three Rashtriya Swayamsevak Sangh (RSS) ideologues, including K N Govindacharya, and a Gandhian have written to Finance Minister Nirmala Sitharaman to levy taxes on foreign technology giants operating and making profits in India.

The two main demands in a representation sent to Sitharaman, a copy of Business Standard reviewed, are: Levying the goods and services tax “on all transactions of India user data by (tech company) parent or its subsidiary companies”, and “Indian office of the subsidiary company be treated as Permanent Establishment (PE) of the parent company for effective tax and corporate compliance”.

Apart from Govindacharya, who is part of the Rashtriya Swabhiman Aandolan, Basavraj Patil Sedam of the Bharat Vikas Sangam, Ram Bahadur Rai, editor of the Hindustan Samachar group, and P V Rajagopal — a Gandhian — of the Ekta Parishad signed the letter.

The letter said tech giants such as Google, WhatsApp, YouTube, Facebook, TikTok, and generated more than Rs 30 trillion from their Indian operations, and because of their “complex web structure”, their Indian revenues remained obscure.

“American and Chinese internet companies have become dominant players in critical sectors of the economy, sans any accountability. The lacunae in taxing Indian and foreign internet companies (have) led to an artificial but significant inequality, putting Indian companies to death bed. Cyber giants are taking advantage of information arbitrage due to lack of coordination amongst Indian agencies. We request you to consolidate all such provisions in the Finance Bill, 2019, to have clarity and focus on taxing these companies,” the letter noted.

The “complex web” referred to is the convoluted structure companies like and use to avoid paying taxes.

The issue was that in India multinational digital platforms did not have “permanent establishments”, something that would have made them liable to pay tax. They could not be doubly taxed, which means the government has had to find a way of earning something from the profits that these platforms have been making.

“This situation is disastrous for the Indian economy. You are in charge of finance as well as Ministry of Corporate Affairs. You may direct an investigation by SFIO (Serious Fraud Investigation Office), RBI (Reserve Bank of India), CBDT (Central Bureau of Direct Taxes), CBIC (Central Board of Indirect Taxes and Customs) authorities and auditing by CAG to ascertain consolidated tax liabilities of group companies," the letter said.

India has escalated its demand that foreign companies operating in India do data localisation. A data protection law is slated to be introduced in Parliament.

“It is universally accepted that these companies make use of users' data to generate huge revenues. When the service is free, the consumer is the product itself. There is a sufficient legal mandate in (legislation) such as the Companies Act, the Income Tax Act and the Information Technology Act to bring such companies within the ambit of taxation,” the letter said.

First Published: Fri, June 21 2019. 01:59 IST