‘Indian income tax sleuths have no way to tax digital value loop’

Indian tax authorities are staring at a growing revenue loss in digital tax collection as artificial intelligence (AI) firms such as OpenAI, Anthropic and Perplexity generate income at a fast clip from Indian developers, companies and startups, despite having no physical presence in the country, reigniting long-standing concerns over the concept of ‘permanent establishment’ in the digital economy.

The companies are earning millions of dollars from Indian developers, startups and enterprises who access their AI models-eg ChapGPT, Claude, Perplexity…