GST and its effect on eBooks

Filing Of Annual Returns Under Goods and Services Tax (GST) Will Be A Tall Task, By Tax Practitioners.

An eBook is the electronic version of a published book that can be read on a computer or a handheld device specifically designed for this purpose. The GST for an ebook was slabbed at 12%. This has left the publishers confused.

GST For Books And Publishers

Books are exempted from GST. However, the electronic reproduction of intellectual property is charged with a GST. Despite the relaxation of no GST for books, bookmaking is still taxable and the cost of making a book will exponentiate from 10% to 28%. These charges will have to be taken up by the publisher unless it is transferred to the reader, as there is no provision to claim input tax credits(ITC). Leading publishers voice their concerns on how the cost of making a book will increase in two ways-1. through the organized sector of bookmaking and 2. by the disorganized sector who do not comply with GST. The organized sector will face an increase from 5% to 18% due to the cost of paper, printing ink, lamination, bookmaking plates, and binding will be costly. The disorganized sector like the offset printers, book-binders and, lamination service providers will face the brunt of GST and shop shut their businesses.

Reduction of GST for eBooks
Though the GST council has announced a reduction in the GST rates for eBooks from 18% to 5%, it is still looked at with skeptical eyes. The reduction of GST applies to an eBook published alongside a printed edition. But what is still unclear is if one single copy is enough to qualify the ebook for the reduced tax slot. Click On – https://www.thehindubusinessline.com/opinion/columns/mohan-lavi/the-gst-system-still-awaits-simplification/article30373718.ece

Auto Players Are Worried A Lot And Asking Govt To Slash The GST Rate.

View Of Publishing Houses On The GST Slash

Famous publishing houses like Hachette House, Penguin Random House,have voiced their concern regarding this new GST slash. They don’t seem quite happy about it, rather are perplexed. They feel that rather than reducing this, had the government reduced the new 12% charge on royalties and 12% charges on printing material been reverted back to 5% it would have been helpful. The second blow is also the lack of ITC(input tax credit) as books have zero GST. They also voice that there is no impact of the reduced GST towards an eBook sale in the country. Globally the sale of eBooks has touched 35% of the sales but in India, it has still stayed around 5% to 7%.

Will the New GST help in achieving its true intentions?

As a step toward the reduction of carbon footprint, the government has made an effort to make eBooks a trend. This was the main reason for slashing the GST on eBooks. This looks like a weak initiative made by the government. The absence of clarity makes this an unwelcome change. The negligence of the government is not considering the production house and the charges it incurs only on royalties is looked at with a stale eye.

How the new GST helps the public is still a mystery as so many questions are still unanswered and we have to wait for the fine print.

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