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Indian app developers required to pay GST for Play Store purchases

With GST, Google has started mentioning the exact value of tax in its Play Store invoices:

Tax-inclusive billing was not available in India until GST was implemented, even though Google has been collecting and paying tax for Play Store purchases since December, when the government started requiring online companies to pay service tax on digital purchases. Google did not include this tax amount in its invoices, and the ‘Tax’ column would show an amount of ‘₹0.00’, even though a Google spokesperson had then told MediaNama that tax was being paid, and Google was absorbing the tax.

The company has said that developers from India will themselves have to bear the responsibility of paying GST, while it will shoulder the responsibility of paying taxes for developers based outside India. Previously, the service tax of 15% was paid by Google for all developers. Now, the amount of tax being paid by Google has presumably increased from 15% to 18% under GST, if the invoice screenshotted above is any indication. GST has replaced the digital service tax which was made applicable on SAAS and content services from outside of India to customers located in India, including online advertising, providing cloud services, purchase of online content, software, storage, gaming.

While some players like Netflix absorbed the earlier service tax, it remains to be seen if they will increase prices now that the tax rate is higher.

Read: The Play Store’s merchant guidelines for GST in India

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© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ