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05 October, 2014

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Google Paying Service Tax, How Come Facebook Exempt ??

Delhi High Court has asked the Centre why Facebook was not paying service tax when Google was and, unsatisfied with the government’s response, asked it to file a “better affidavit” explaining the issue.

“How is Google paying (service tax), but not Facebook? How is Facebook exempted? We are finding it difficult to understand,” a bench of Justices Badar Durrez Ahmed and Siddharth Mridul said.

The bench also asked whether the government was “alive” to the issues of sale of data by social media sites as well as the service of targeted advertisements provided by them. “Why don’t you know all these? Are you alive to these things or is it beyond your comprehension,” the judges asked.

The query was raised after advocate Virag Gupta, appearing for former BJP leader K.N. Govindacharya, raised the issues. The court was hearing a PIL filed by Govindacharya seeking recovery of taxes from the websites on their income from operations in India.

The government, represented by advocate Sanjeev Narula, said Facebook Inc had no office in the country, while Facebook India had one in a Special Economic Zone from where it exported services and was thus exempt from service tax.

The bench then sought information from the government on remittances being made to Facebook Inc from India and whether the transactions between the website and various Indian companies were in the nature of services.

Source :- PTI


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