Google, mired in tax controversies in different jurisdictions, wants a quick decision on its dispute with Indian tax authorities. Google Ireland has moved theAuthority for Advance Rulings (AAR) to determine the tax liability here.

According to the Indian tax department, Google India's businesses are 'dictated by Google Ireland', and the profit and loss account filed by the MNC's Indian arm,Google India Pvt Ltd "does not give complete picture of the businesses." The department had imposed a 76-crore penalty on Google India Pvt Ltd, alleging that it had deflated income and shown wrong revenues for the assessment year 2008-09. At the heart of the tax dispute is income that the search engine giant is crediting to Google Ireland as distribution fees.

The I-T department says Google did not deduct tax at source before crediting the amount to Google Ireland although the income has arisen in India and both the advertisers for its AdWords Programme and people using the advertisement based in India.

The AAR's ruling will be binding on the tax office as well as Google.

"Google chose to fast-track the case to end the tax uncertainty. It approached the AAR a little over a month ago," said a person aware of the case.

Responding to an email from ET, a Google spokesperson said, "We place great importance on following local law and we comply with applicable tax rules in all countries where we operate, including India. We also make a substantial contribution to local and national taxation and provide employment for close to 2,000 people in India."

AAR, headed by a retired Supreme Court judge, is a facility open to non-residents for ascertaining tax liability and avoid protracted court feuds.

Globally, Google, as well as other Internet giants such as Amazon, have attracted the ire of authorities for avoiding tax by routing income through tax havens like Bermuda. Google's tax practices are under investigation in France, Italy, UK and Australia among others, where authorities are probing the mismatch in income generated through sales and the tax paid in that country.

Using a series of transactions across different geographic entities, MNCs can show higher income in tax havens and higher expense in the countries where the tax rate is higher, irrespective of where the revenue is earned. Apple, for instance, is reported to have paid less than 2% tax on its overseas profits. (Economic Times)