India to Tax Downloads at 15%

November 14, 2016 Taxation in India

Service Tax on Media in IndiaNEW DELHI – Fans of music, movies, books, and other online services in India will soon see their bills jump, following the announcement of a 15 percent service tax.

Last week the government of India announced several tax changes, among them was the implementation of a tax on downloads and purchase of digital goods from offshore retailers.

Currently, purchases of digital goods and services such as online storage, movies, games, and music downloaded from a provider registered in India is liable for a service tax of 15 percent.

Downloads from foreign-registered service providers were exempt from paying the 15 percent tax, however, following the full implementation of the new rules, the exemption will be dropped.

It is expected that the application of the service charge will see an increase in tax revenues for the government, although no estimates were provided on the extent of the tax boost.

Further, some experts believe that the equal imposition of the service charge will result in a more equal playing field between the conditions felt my local service providers and offshore providers.