15% service tax will be implied on music, e-books sold on foreign portals

The next time you download music or an e-book from an overseas site, or decide to buy some storage on a cloud from an overseas service provider, beware. Beginning December 1, a service taxcomponent of 15% will be added to your bill.

Domestic suppliers, say of movies which can be downloaded by customers in India, already incur this service tax. But if the supplier is overseas, the tax doesn't apply if the recipient is an individual, government, local body or government agency based in India. Overseas suppliers incur the service tax only in respect of B2B transactions where the recipient is in India. Further, an exemption is available in such B2B transactions if the supply is related to information databases (such as a subscription for international tax journals).


In a surprising move, the Central Board of Excise and Customs (CBEC) has—through four separate but interlinked notifications dated November 9—significantly amended the 'Place of Provisions of Services Rules' (PPSR) for 'online information and database access or retrieval services', thus impacting your bill.

source:TOI

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