AHMEDABAD: Some 300 International Service Entities (ISEs) including search engines and e-commerce companies which provide services to Indian customers, have not paid taxes on their transactions in India, allege members of the GST Federation. A representation regarding this was sent to the state commercial tax commissioner, seeking to tax ISEs.
The representation states, “The ISEs may be providing search results for free but the platforms not just record the personal information of users including their geographical location but also sell it to marketing and advertising firms. Therefore, they should be taxed.”
According to the federation members, any company, irrespective of its location, which provides goods or services to Indian customers is liable to pay taxes in India. The representation has also cited multiple provisions in the GST Act through which transactions which are apparently non-financial in nature, can also be taxed.
The representation has also cited the ‘MIS Report 3.11 of the GST System Module’ and stated, “No such company has paid a single penny in India. Even though the GST department has all the information about such ISEs operational, no action as yet as been taken.”
A senior commercial tax department official said, “Even if the user information is sold to marketing firms, as alleged; unless there is proof of such transactions, the concerned entity cannot be taxed.”
