The Delhi high court has given an interim relief to a Singapore-based subsidiary of Google in its tax dispute with tax authorities in India.
The court has allowed Google Asia Pacific Pte Ltd to receive payments to the tune of Rs 1106.41 crore from Google Cloud India after withholding tax of eight per cent, inclusive of surcharge and cess, for the assessment year 2022-23.
The tax department was asking for ten per cent tax after the company applied for a certificate for paying zero per cent tax.
However, Google Asia Pacific filed a petition in the court that there should not be any withholding tax on its payments from Google Cloud India as it has already subjected itself to a two per cent equalisation levy.
The court’s ruling is an interim measure and it posted the matter for May.
Sandeep Sehgal, partner tax at AKM Global, said,”Such confusion is expected till the time equalisation levy is in place. Google Cloud Services could be considered a fit case for applicability of EL and may not be subject to withholding.”
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