Start-ups which are profoundly reliant on online stages like Google, Facebook, Twitter, LinkedIn to drive their business as it is additionally a financially savvy alternative may now need to pay an assessment of 6% on cross-border digital transactions of more than Rs. 1Lakh. Dubbed as the “Google tax” this is basically a roundabout duty on foreign organisations like Google and Facebook for online administration they give to Indian organisations that cost above Rs. 1 lakh a year.
Thus, it is the start-ups that lose out in the bargain as the cost of doing business increases, and there are no viable alternatives to their dependence on online resources. More established companies, on the other hand, always have the option of depending on other legacy channels (such as television, newspapers, outdoor advertising, etc.) for promotions and operations.
As the expense of operation expands, the cost is additionally prone to increment for the end-client.
The equalisation levy or popularly known as ‘Google tax’ which came into effect from June 1 is set to affect the operations of Indian new companies with higher money related weight and managerial over-burden.