The Information & Broadcasting (I&B) Ministry has urged the Ministry of Finance to reduce the GST on digital news subscriptions. In a letter dated July 22, I&B secretary Sanjay Jaju requested his revenue counterpart Sanjay Malhotra to either exempt the GST on digital news subscriptions or reduce it from 18 per cent to five per cent.
He cited that newspapers were exempted from GST because the significance of giving "correct and factual information" to citizens was recognised. He also said that a similar disparity between printed books and e-books was addressed in 2018 when the GST Council reduced the GST rate on e-books from 18 per cent to 5 per cent.
"The number of paid subscribers for online news in India is very small as compared to the overall number of users accessing news on the internet. In this regard, it is observed that a higher rate of GST on digital news subscriptions may skew further growth of the online news sector towards an advertising model which may impact the quality and credibility of the news content on the internet through practices such as the use of clickbait and sensational headlines, and fake and misleading news, etc," the letter read.
"Recognizing the significance of the availability of correct and actual information for the citizens of the country, printed newspapers are exempted from GST. With the growing internet penetration in India and the nascent stage of the online news industry, it may be
appropriate that online news subscriptions are treated at par with printed newspapers or ebooks for the purpose of GST," Mr Jaju said.
He stated that the 18% GST on the Rs 120 crore online news subscriptions industry brings tax revenue of about Rs. 21.6 crore and that if the GST on digital newspaper subscriptions is brought down from 18% to nil, or to 5% at par with e-books, it may not lead to substantial revenue forgone by the Government exchequer.