The Delhi High Court on Wednesday issued notice to the finance and home ministries on a plea to recover tax from social networking websites, arising out of their internet-based business in the country.
The Delhi High Court on Wednesday issued notice to the finance and home ministries on a plea to recover tax from social networking websites, arising out of their internet-based business in the country.
A division bench of Justice BD Ahmed and Justice RV Easwar also issued notices to the law and information and broadcasting ministries and department of personnel. The court sought responses of central ministries within six weeks and posted the matter for April 9.
The court earlier sought response from the information technology ministry and social networking sites Facebook India and Google India.
The court's direction came on a public interest litigation filed by former Bharatiya Janata Party ideologue KN Govindacharya.
He asked the court to direct the government to recover all past and present direct and indirect tax demands arising from business income from Indian operations of different social networking websites.
The petition sought direction to ensure proper accounting compliances as per the Reserve Bank of India guidelines.
Govindacharya pleaded for a court order to these companies to implement the verification norms issued by the central government.
He said penalties should be imposed on social networking sites and other internet-based companies for non-verification of their users.
The petitioner, at present involved in social service through his organisation Rashtriya Swabhimaan Aandolan, said: "Facebook gross revenue for previous year was approximately $37 billion..."
"...They are not paying due taxes on their Indian operations as per provisions of double taxation avoidance agreement and the government is not taking any action to safeguard the national interest and sovereignty of India."
The petition also said that social networking sites should be directed to ensure verification of all existing and future users and refrain from allowing access to children below 13 years, which against law.
"As per reports, Facebook has further allowed account opening by children below 13 years of age who may be 1/3rd of their registered users just to exploit online gaming market and increase advertisement revenue," the petition said.
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