India is taking steps to impose tax on income generated by Netflix Inc’s from streaming services in the country, reported Reuters citing a Economic Times reported.

In a draft order, the tax authorities attributed an income of about Rs. 55 crore ($6.73 million) to Netflix’s Indian permanent establishment (PE) in the assessment year 2021-22, the report added.

This is the first instance in which India will tax foreign digital companies that provide electronic commerce services to customers. The tax officials reasoned that the US 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. This has led to the establishment of a permanent presence in India, which in turn creates a liability for taxes.

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