Income Tax lens on Google, Amazon & Apple for likely Rs 5,000 crore demand

economictimes.indiatimes.com:

Income Tax (I-T) Department is investigating the Indian units of Apple, Google and Amazon over possible non-payment of tax. In connection with a probe that began in 2021, the authorities have sought detailed explanations from the tech behemoths on their transfer pricing (TP) practices, according to people aware of the matter.

The department is eyeing a tax demand of over Rs 5,000 crore and has rejected many of the justifications provided by these companies, the people said.

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The Indian arms involved in the matter are Apple India Pvt Ltd, Amazon Seller Services India Pvt Ltd and Google India Digital Services Pvt Ltd.

The nub of the matter is the methodology followed in TP adjustments, resulting in what the department views as possible tax liabilities. The issue pertains to various assessment years, and is currently at different stages of investigation and litigation at several forums.

Amazon and Apple have engaged PwC to represent them.

Emails sent to Apple India, Google India and Amazon India did not elicit a reply until press time.

However, people from the industry close to the tech giants told ET that the MNCs receive multiple “routine queries” from the department, as there is a difference in the methodology of tax calculations used by the companies and that of the revenue department. “… in the event they (the queries) don’t (get) resolved, the companies always have the option to appeal before the appellate authority,” said an industry source.

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