India seeks global e-commerce tax rules ahead of G20 meeting

Govt has asserted new taxation rules for global e-commerce firms. This move will impact several global giants that are taking advantage of the current rules.
India asserts to bend E-commerce tax rules ahead of G-20

The Indian government has asserted new taxation rules for global e-commerce firms. This move will impact several global giants that are taking advantage of the current rules to avoid paying taxes. India has already flagged the issue ahead of the G20 meeting in Brisbane next week, which will be attended by Prime Minister Narendra Modi, according to a report published in Times of India.

Commenting on the issue, Suresh Prabhu, the sherpa for the G20 talks told TNN, "We have submitted a paper. The principles have to be laid down and e-commerce may be covered. He said that taxation of e-commerce was a complicated issue as the logistics, production and consumption may take place in different parts of the globe.”

Besides, India has highlighted the issue at a time when the world's 20 most powerful economies are discussing a new global order to tax multinationals, who avoid paying any levies by using complex corporate structures and tax treaties. While a formal launch to Base Erosion and Profit Shifting is expected to be endorsed in Brisbane, India is looking at e-commerce as a key takeaway, said an official in a TNN report.

While automatic exchange of information to help recovery of black money is the other issue on the agenda, India is unlikely to face any embarrassment at the summit despite New Delhi not signing an agreement in Berlin next week due to the Supreme Court's observation on the confidentiality clause. An official said apart from India, several of the "early adopters" have not signed the treaty so far. "We remain committed to it and there is time since we need to take domestic approvals," the officer told TNN.

This move will be a major gain for the country, in the form of endorsmnets for demand for lower charges on remittances. Further, Prabhu said that in some countries, the charges were as high as 10%, which reduced the amount transferred by workers living abroad. "There is some understanding on a levy of around 5% and Saudi Arabia has agreed to reduce it to 3.5%, which will benefit poor workers the most," he said.

As per the report, India is the largest recipient of remittances, which are estimated at over $70 billion, with a large part of the money coming from Indian workers in the Gulf, who send money to their families.

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