Taxing Digital Presence In India: A Study On The Concept Of Significant Economic Presence

Mr. Mohit Yadav & Ms. Swati Jhajhria, LL.M. (Corporate Law), National Law University, Jodhpur

ABSTRACT

There has been a peculiar relationship between the nature of economy and taxation regime in India. With the globalisation of economy, Indian taxation regime started taxing non-residents on the basis their physical presence in India. Now, with the digitalisation of economy, non-residents enterprises do not require physical presence to have business transactions with India, therefore, the taxation regime of also needed finetuning to catch the pace of digital transactions to exercise its right of taxation on the profits attributed to be earned in India. This research paper is the study of concept of “Significant Economic Presence” which was adopted by India to expose non-resident digital business models to taxes in India.