Google can pass the 2 per cent equalisation tax to all its clients, even if they are based out of India. This decision will cause problems for companies like Amazon, Apple, Twitter, Facebook and LinkedIn as the tax department will likely ask them to follow the action. These tech companies have not decided yet to pass the tax to customers.

So, if a US-based company chooses to advertise with a Europe-based company, but the advertisement is visible in India, the tax will be applicable. The tax will also apply if an Indian IP is used. For example, if a Singapore citizen visits India, and orders some goods from the Amazon website by using hotel WiFi, then he would have to pay a 2 per cent tax.

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Google recently said that from October 1, 2021, it would add a tax to the invoices it sends to non-Indian customers whose ads are viewed in India. “The surcharge is to cover part of the expenses connected with complying with the Indian equalisation tax, which will only impact non-Indian advertisers. We will continue to pay all the taxes due in India and abroad,” a Google spokesperson said.