Google, Facebook won't have to pay domestic tax under new IT rules

Appointment of grievance officer does not imply permanent establishment, say officials

For digital multinationals such as Google, Facebook and Twitter, appointing grievance officers under new information technology (IT) rules does not imply that they have a “permanent establishment” in India.

But if their local office performs business functions and contributes to revenue of the parent firm abroad, it may attract domestic taxes, said two people in the revenue department.

This has come in the wake of foreign tech companies and others seeking legal advice on the tax implications of the government’s new IT order. They are required to appoint chief compliance officer, nodal officer and grievance officer from India. These firms fear that