India’s New E-Service Tax Daunts Content Providers


BENGALERU: Whereas the entire nation remains to be attempting to get a grip on the Modi authorities’s demonetization marketing campaign, there’s a semblance of unrest within the e-commerce trade in India. This can be a probably big new tax transfer for the federal government that might ruffle the feathers of giants like Amazon and Hungama.com.

Based on notifications issued by the Central Board of Excise and Customs, it’s going to turn out to be obligatory for customers to pay a 15% service cost on software program purposes, e-books, music, films or some other downloaded content material, if the provider is overseas. . This resolution will take impact from December 1, 2017.

Now two information are dropped at gentle. First, the attain of smartphones in India is round 30%, implying a possible taxpayer base of 300 million folks for the Modi authorities. Second, gaming is now shifting worldwide to membership-based companies from main corporations like Apple, Gaana.com, Wynk, and Amazon, amongst others, and meaning big income for the federal government.

However the query stays: does the brand new tax on companies profit home suppliers? The reply appears to be “No” because it solely offers an excellent taking part in discipline for gamers.

The important thing level of this new tax regime is that it seems extra as an effort to confirm an anomaly between home and overseas content material suppliers and in addition create new income alternatives along with a levy to crack down on tax evasion.

With all that stated and performed, customers seem like the first beneficiaries and can bear the brunt of this new service tax, as there stay lingering questions on what occurs to vacationers and different vacationers to India who obtain content material from overseas.

The system appears to be difficult, as content material suppliers, service suppliers and others work as a staff and this old style means of treating content material as property will do way more hurt than good.

The sport appears complicated as a result of in a linked world the place storage, content material and completely different service suppliers work as a staff, the old style logic of equating digital content material with manufactured items will do way more hurt than good.


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