Daijiworld Media Network - New Delhi

New Delhi, Feb 11: India had abolished its 6% equalisation levy on digital advertising, popularly called the “Google tax,” well before the India–US trade framework was announced, clarifying earlier reports suggesting it was part of the bilateral deal.

The levy, applied to foreign technology firms providing digital advertising services, was removed through amendments in the Finance Bill 2025, effective April 1, 2025—nearly 10 months prior to the unveiling of the trade framework between New Delhi and Washington.

The development gained renewed attention after the White House revised its fact sheet on the trade framework, deleting language stating India “will remove its digital services taxes.” The updated version now only mentions India’s commitment to negotiate bilateral digital trade rules addressing barriers to digital trade.

Introduced in 2016, the 6% equalisation levy targeted payments to non-resident digital companies, including Google and Meta, for advertising services, even if they lacked a physical presence in India. Its removal aimed to ease trade frictions with the United States and reduce the tax burden passed on to Indian advertisers.

Earlier, India had also scrapped the 2% equalisation levy on non-resident e-commerce operators through the Finance Act, 2024. US negotiators had sought assurances that such digital taxes would not be reintroduced, but Indian advisers maintained that future tax policy remains a sovereign prerogative.