IT Department may Tax Netflix's India operations

India is seeking to tax Netflix Inc’s income earned from streaming services in the country, the Economic Times reported on Friday, citing people familiar with the matter. Also Read: Airtel 1-month plans now live: Which one should you pick? Check price, perks, more

In a draft order, the tax authorities attributed an income of about 550 million rupees ($6.73 million) to Netflix’s Indian permanent establishment (PE) in the assessment year 2021-22, the report added. Also Read: OTT releases this week (April 13-19): Euphoria S3, Toaster, Matka King, Assi and more

Tax officials reasoned that the U.S. firm had some employees and infrastructure from the parent entity on secondment in India to support its streaming services, leading to a PE and tax liability, the publication reported. Also Read: Netflix Playground app launched: Interactive games, puzzles and learning for children with no ads

The move is the first time India will tax overseas digital companies providing electronic commerce services to consumers, the people told to ET.

Netflix did not respond to a Reuters’ request for comment.

($1 = 81.7800 Indian rupees)

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—Reuters