Government Proposes Reducing GST on Online News Subscriptions to 5%: MIB Requests Action
By: Admin
August 17, 2024
Categories: GST Recent News
4 Min Read
The Ministry of Information and Broadcasting (I&B) has recently proposed a significant reduction in the Goods and Services Tax (GST) rate on digital news subscriptions. According to the Hindustan Times, the Ministry has formally asked the Revenue Department to rethink the current GST policy for digital news platforms.
Proposal Overview
On July 22, the I&B Ministry proposed two main changes to the GST policy for online news subscriptions:
- Exemption from GST: The Ministry suggested that digital news subscriptions should be exempt from GST.
- Reduction in GST Rate: Alternatively, it proposed lowering the GST rate from 18% to 5%.
These changes aim to support the accurate dissemination of news. I&B Secretary Sanjay Jaju argued that the high GST rate harms the growth of the online news sector. He noted that many online platforms depend heavily on advertising revenue due to the tax rate. Consequently, this reliance can affect the quality and credibility of news content.
Current GST Policy
Under the Integrated Goods and Services Tax (IGST) Act, online news subscriptions are taxed at 18%. They fall under Online Information Database Access and Retrieval (OIDAR) services. In contrast, printed newspapers and periodicals are exempt from GST. This discrepancy has raised concerns among industry stakeholders.
Jaju emphasized that the online news sector is relatively new compared to traditional print media. With increasing internet use and changing news consumption habits, the current GST rate creates an imbalance. Aligning the GST rate for digital news with the 5% rate for e-books could help resolve this issue.
Previous Discussions
The GST Council discussed reducing the GST on online news subscriptions in July. However, the Council, chaired by Finance Minister Nirmala Sitharaman and including representatives from all States and Union Territories, did not approve the recommendation.
The GST Council, responsible for setting GST rates and policies, has yet to act on this issue. This delay reflects ongoing debates about the taxation of digital services.
Impact on the News Industry
The online news industry has expanded significantly due to digital platforms and increased internet access. However, the high GST rate places a financial burden on digital news providers. This burden affects their ability to invest in quality journalism. Often, reliance on advertising revenue leads to sensationalism or clickbait, undermining journalistic standards.
Thus, the I&B Ministry’s proposal aims to support digital news platforms’ sustainability. Lowering the GST rate could also encourage more consumers to subscribe to digital news services, fostering a competitive and diverse media landscape.
Conclusion
The I&B Ministry’s proposal to lower the GST rate on online news subscriptions underscores concerns about the current tax policy’s impact on the digital news sector. As discussions progress, policymakers and media stakeholders must weigh the benefits of a reduced GST rate against potential effects on government revenue and the broader tax system.
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