India to Axe 'Google Tax' From 1 April Amid US Tariff Threats

Move to drop controversial levy comes in the wake of ongoing trade talks with Washington

- Gireesh Chandra Prasad

The government is likely to withdraw the 6% 'equalization levy' introduced in 2016 on online advertisement services rendered to Indian businesses by offshore digital economy firms through amendments to the Finance Bill, 2025, to be taken up by Parliament this week, two persons familiar with the development said.

In August, the government had removed a 2% levy that applied to a wide array of services rendered to Indian businesses by offshore tech firms including cloud services and e-commerce services.

The government had then retained the 6% levy that applied to online advertisement services by offshore technology companies that do not have a physical presence in India.

The equalization levy "shall not apply to any consideration for any specified service received or receivable by a person on or after the first day of April 2025," one of the persons quoted above said, quoting the proposed amendment.

Queries emailed to the finance ministry seeking comments for the story remained unanswered at the time of publishing.