India 15% Service Tax on foreign e-services

30 November 2016

From 1 December 2016 the Indian Government will impose a service tax at 15% on the sales of e-services to consumers in the country.

At present, non-resident businesses providing digital services in India do not have to charge service tax on their sales.  However, in an effort to remove the unfair advantage given to non-resident companies over Indian resident providers, the Indian Government has now confirmed that the service tax at 15% will be applied on these types of transactions.

The Indian government also confirmed that there will be an annual registration threshold of Rs 10 Lakh (approximately £11,700) and businesses affected will be required to register with the Indian authorities immediately via a local tax representative.

This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.