Google and Meta evade over Rs 100,000 crores of GST and over Rs 75,000 crore pa of Income tax in India by squaring off sales and purchases. Over the last 20 years they have cheated India of a humongous Rs 25 lac crores. All of which has gone to their bottom line.
Suppose you sell me Google maps at Rs 1500 pm and buy my location data for Rs 1500, you need to raise a bill for Rs 1500, charge GST at 18% and I need to deduct 10% tds when I pay you. Now when I sell you my data for Rs 1500, I need to raise a bill on you and charge applicable taxes. By squaring the two off, they are evading taxes of an unimaginable quantum.
And the Indian tax department is not even raising a demand on them. I could also start selling my goods and services against gold or bitcoins and square off the transaction. But the tax department will lock me up.
Why do they not do so for Google and Meta ? Have these companies been given tax exemption by the department ? Apparently NO !!! It is a simple case of evasion of Rs 25 lac crores. With penalty of 200%, it is a fit case for realisation of the Rs 75 lac crores. Actually more.
Given their USD 6+ trillion valuation, they can very well afford to pay.
Google started with a tagline “Do no evil” and went on to become THE dark side. By propagating free as the radical price of the internet – it made human attention saleable. It sold your privacy, monetised your questions and eliminated the boundary between who is the customer and who is the supplier.
The incredible cash machine built on free, was highly profitable – throwing out so much cash that search became a small subset of its product portfolio of monopolistic freebies which range from Google pay to YouTube to Google maps to Gmail to Google meet. And now Gemini and maybe Google Health.
And now by implementing the freemium model, they can accelerate the cash flow by making commercial users pay through their nose.
What the freemium model has done is to establish the market value of their goods and services. I think for Google maps, it is upward of Rs 2000 per user per month. So they need to pay GST of Rs 360 per user pm to the government. Since they buy the data from mostly unregistered sellors, there is no gst credit.
And now Facebook or Meta has arrived on the scene selling addiction. All of India is spending office hours watching reels endlessly. Meta generates advertising revenue which is more than Google as they sell the attention got from the addiction. For this these companies have to be billed a productivity loss tax equivalent to the man hours of paid office time lost to the addiction. And they need to provide statistics of the time spent.
The police department is not able to police because all policemen are watching reels all day. This has led to an increase in the crime rate and a reduction in the conviction rate.
All of Google and Meta profits come from this evasion. And why is the tax dept not interested in collecting this tax.
