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Amid US pressure, why India has decided to abolish the ‘Google tax’

In a move which is likely to benefit American big technology companies and also assuage US concerns about India being a high tariff nation, the Central government has proposed to abolish the equalisation levy on online advertisements, a part of amendments to the Finance Bill, 2025.

Experts believe that the move by the Indian government is aimed to ease trade tension with the United States, with New Delhi wanting to show a more accommodative stance as the two countries discuss a potential trade deal.

What is equalisation levy

By definition, an equalisation levy is a levy to ‘equalise’ the tax component of a resident e-commerce company as well as a non-resident e-commerce company.

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