India in a quagmire over Digital Taxation
On the 1st of July 2021, the OECD nations adopted a High-Level statement containing an outline of the possible solution to address the digital tax challenges arising from the digitization of the economies. India, which is also a signatory to the statement, has been consistent in its stand to equitably tax the digital economy. With the advent of the NDA Government in 2014, India’s pitch for accelerated digitization was evenly matched with its quest to tax the growing digital economy, primarily driven by the fact that despite being one of the largest markets, most of the technology giants did not pay income tax in India. India’s first move: While a consensus eluded the major nations on the appropriate manner of taxation of the digital economy, India, introduced a new concept called the Equalisation Levy (EL) in the 2016 Budget. India and Israel were among the earliest countries to unilaterally levy a digital tax on the foreign companies. India ...