Sources indicate that the Finance Ministry is poised to reassess the Goods and Services Tax (GST) rates applicable to digital news subscriptions. This decision comes in response to a suggestion from the Information and Broadcasting (I&B) Ministry to slash the GST rate on digital news subscriptions from the existing 18% to 5%.
Key Points in Focus
Below are the key points focused on the GST rate reduction in digital news subscriptions:
Upcoming GST Council Meeting
The forthcoming 54th meeting of the GST Council, scheduled on September 9, 2024, in New Delhi, will deliberate on this matter. The session will scrutinize the recommendation and explore potential revisions to the GST rate for digital news services.
Existing GST Applicable
As per the Integrated Goods and Services Tax (IGST) Act, online news subscriptions fall under the category of Online Information Database Access and Retrieval (OIDAR) services, attracting an 18% GST levy. This categorization applies to services offered through the internet where there is no need for a physical interface between the information source and the reader.
Recommendation by the I&B Ministry
The I&B Ministry has put forth a proposal to decrease the GST on digital news subscriptions, citing concerns that the current 18% rate poses a threat to the revenue models of online media platforms. The Ministry contends that a lower GST rate is essential to uphold the calibre and longevity of news content.
Impact on Media Entities
Online media entities have raised questions about the increased GST rate, contending that it adversely impacts their financial viability and, consequently, the standard of their journalism. Lowering the GST rate could resolve these concerns and set the sector’s expansion.
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Current GST Exemptions
Printed newspapers, journals, and periodicals presently enjoy GST exemptions, underscoring a disparity in the tax treatment between print and digital news formats.
Conclusion: The impending review by the Finance Ministry regarding GST rates for digital news subscriptions reflects the ongoing discourse about the tax policy’s ramifications on the media domain.
The conclusion of the September GST Council meeting will be pivotal in determining whether adjustments to the GST rate for digital news subscriptions are approved, potentially influencing the sector’s revenue streams and operational landscape.