Google’s Indian arm made a good profit last year according to its filing made recently with India’s Registrar of Companies. As per official records the company made a net profit of more than Rs. 150 Crores (US$ 27.8 Million) after deduction of taxes.
Has Google India grown financially?
The answer is a firm YES. Google’s profits, as compared to a year earlier rose almost 10%. Incidentally, if one considers the profit it earned, without considering the taxes, it gained Rs. 229.38 Crores (US$ 42.51 Million). This figure is more than 53.51% as compared to the fiscal year before that. That year Google only made a gross profit of about Rs. 150 Crores. So overall, profit available for appropriation was Rs. 577.99 Crores (US$ 107.3 Million), up from Rs 427.25 Crores (US$ 79.31 Million) the previous fiscal.
Google has always been in the cross-hairs of the Government of India, who strongly felt the company was misleading the Income Tax (IT) Department by deflating income, and crediting the bulk income to Google Ireland. While facts are yet to emerge completely, Google had hereto steadfastly claimed that it only had a ‘Sales Office’ of Google Inc. in India. But the Government was not amused & it slapped a penalty of Rs. 76 Crores (US$ 14.1 Million) on the company. Google India appears to be a carefully orchestrated company to ensure the majority of the profits appear to have been made out of the purview of the Indian Government & its Tax laws. While we cannot comment on the efficacy or company-friendliness of such laws, quite a few companies resort to such tactics to avoid paying significantly high transaction taxes to the Government.
Google India’s ‘reserves’ have inflated by more than 150 Crores as compared to last fiscal & currently sit at Rs 616,72,19,535. Hence one can confidently say, the company has a heavy investment in India. How should the Indian Government demand taxes from these foreign companies?
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