Knock, knock. Who's there? E-commerce. E-commerce, who? India does not care for you. The Union Budget 2010 is setting up the government for some serious ridicule from the Indian Internet community if this Business Line report is true. It says that the new budget has proposed a 10% service tax on all downloads of paid software applications onto a mobile or a personal computer. Make that 10.3% tax because software created by "foreign suppliers" will be charged more under an irksome clause called ‘reverse charge principle' and most of the software or the latest mobile apps we buy is developed by foreign companies. Under this reverse charge clause, individual users will apparently have to register for the service tax provisions and file the statutory returns for every piece of software they buy online, even for personal use. To top it off, this is applicable for every individual purchase one makes. So if you wanted to upgrade your blog's theme and bought one, you would automatically have to go through the process of registering and filing 10.3% service tax on it! And how will the government keep a track of every user in India who purchases software online? Mobile networks might be easier, but does the government really expect all of them to diligently register and file the service tax? Ridiculous. The government is taxing all kinds of software you really need to use (and the groovy mobile app you just HAVE to have) and has ensured you dont get away…
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