Govt considers payment gateway before widening Google Tax net

Levy is aimed at firms which earn ad revenue in India but do not pay income tax in the country

The government might put in place a payments gateway platform and tighten the Income Tax Act to prevent global online companies from passing on the equalisation levy, which is imposed on them, to their clients.

The levy, or the Google tax, is paid by those without a permanent establishment here and which have an income exceeding Rs 1 lakh a year.  An equalisation levy of six per cent was introduced in June last year to tax only online advertisements, and this affected companies such as Google, Yahoo!, Facebook, Twitter and LinkedIn.

The rationale behind the levy is that the companies