'Google Tax' Kicks In, India’s Growth Is The World’s Fastest And Other News

Taxing: It’s June 1, the day the “Google tax” comes into effect in India. Officially called the equalising levy, it’s a tax on online advertising revenue paid by Indian advertisers to Alphabet, Facebook and Twitter. For Indian companies, there’s a bunch of new paperwork related to their internet ads. While the government’s aim is to bring global giants earning hefty revenue from the world’s second-biggest internet market into the tax net, it does raise a question about its other big priority - make it easier to do business in India. The other question, of course, is whether Google and others will absorb the tax or pass it on to consumers? If they do pass it on, many smaller businesses will have to face higher costs, yet another blow for them.

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GDP: It’s official now. India is the fastest growing major economy in the world. It grew 7.6 percent in the year ended March, beating China’s 7.2 percent, giving the Modi government a reason to continue its second anniversary celebrations. However, there are already questions being raised about quality of data and investments are on the decline. As for the man on the street, these numbers won’t matter if the rains don’t live up to their promise.

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Internet calls: Besides figuring out a policy for net neutrality and policing call drops, TRAI is also looking at other telecom issues such as internet calls. The telecom regulator wants to allow telcos to offer internet calls like Whatsapp and Skype. The companies have for long been complaining that these services eat into their revenue and Airtel, two years ago, had tried to charge for internet calls made through its network, which didn't go down very well. Now TRAI wants to take a shot at framing a policy for them.

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Vodafone’s IPO: For stock market investors, here are some timelines. The telecom company plans to hit the market with its $2.5 billion IPO (India’s biggest IPO in five years), by March and will file its papers with the regulators by September. The sale is critical for Vodafone which has to augment its investment in India to fight off competition from local players such as Reliance and Airtel. At the same time, one cannot forget the high profile tax spat between Vodafone and Indian taxmen.

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Not Interested: Apple doesn’t want to set up its own stores in the country if the government doesn’t waive the 30 percent local sourcing rule. There are no plans to set up manufacturing facilities in India or even source parts from local makers. Offering a ray of hope to Apple, Commerce minister Nirmala Sitharaman has backed its request and said she will try and convince the finance ministry to approve the waiver. Key will be whether the government believes that Apple’s product fall into the “cutting edge” technology. Now that  Xiaomi has dropped its request and hopes to set up a plant in the India, whether the government will listen to Apple is anyone’s guess.

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