15% tax on music, e-book downloads from overseas websites starting Dec 1: Report

Beginning December 1 this year, a service tax component of 15% will be added to your bill if you download music or e-books from any overseas site, Times of India reported on Saturday. The tax will also apply if you buy cloud storage from any overseas service provider.


The Central Board of Excise and Customs, through four notifications dated November 9, changed the definition of ‘place of provision of service’. The tax component, according to the report, is the result of amendments by the Central Board of Excise and Customs in the ‘Place of Provisions of Services Rules’ (PPSR) for ‘online information and database access or retrieval services’.

Currently, if a service provider is based outside India then the place of provision of service is also considered outside India, thereby no service tax is payable on such services supplied to individuals, government and government bodies in India.

From December 1, the place of provision of a service will be the location of the service recipient. The report further added that overseas suppliers incur the service tax only in respect of business-to-business (B2B) transactions, where the recipient was in India.

Sunil Gabhawalla, chartered accountant and indirect tax expert told TOI, “…all downloads in India will be subject to service tax. The amendments impact overseas companies providing various services like advertisements, web subscriptions, cloud hosting, music, e-books and gaming, to name a few,”

Gabhawalla added that these services provided to governments and individuals were earlier not subject to service tax. “They now become taxable and the overseas service provider or any intermediary or authorised representative will need to register in India and pay the service tax,” he added.

The publication also reported that the definition of ‘online information and database access or retrieval services’ has also been changed.

Also read: Prepare to pay more for telecom services, courtesy Goods and Service Tax

“It now means services whose “delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology,” the report explained.

Reported By

Leave a Reply

17 Comments on "15% tax on music, e-book downloads from overseas websites starting Dec 1: Report"


Sort by:   newest | oldest
November 14, 2016 9:16 am 9:16 AM

Does this affect steam?

November 13, 2016 9:50 pm 9:50 PM

Instead of levying more and new taxes on people who already pay their due of taxes, government should find ways to make people who don’t pay any tax.
Eg: All those kirana and wholesale stores pay zero taxes on lakhs of monthly revenue while they shamelessly use the roads and other public services paid for by honest tax payers.

November 13, 2016 11:30 am 11:30 AM

The government wants to increase software piracy by making it more costly. Long live the government.

November 13, 2016 4:39 pm 4:39 PM

Atleast companies buy full. Individual, non profitable users use the cheaper alternatives….even to sell smaller share, companies will start operations in india.

Sunny | Lucknow
November 13, 2016 12:44 pm 12:44 PM

People have downloaded ten lives worth of pirated stuff amounting to lakhs of Rupees all these years, time is coming when they get into a habit of paying for what they use. Eventually there will be a big crackdown on piracy as well. Can’t stop it 100% but will become difficult to get your hands on pirated stuff.

November 13, 2016 12:23 pm 12:23 PM

And you wants a way to not pay any tax to gov . Good Job