DNPA requests Government to Exempt GST for E-Papers and Digital News Subscriptions

The Digital News Publishers Association (DNPA) has urged the Indian government to exempt e-papers and digital news subscriptions from the Goods and Services Tax. The DNPA emphasized that whether news is disseminated through printed newspapers or digital platforms, it is essential that news material be freely available and at reasonable prices.

Lately, the Information and Broadcasting (I&B) Ministry asked the Ministry of Finance to reconsider the Goods and Services Tax (GST) rate on digital news subscriptions. Printed newspapers and journals are currently exempt from GST, whereas online news subscriptions are subject to an 18% rate under the Integrated Goods and Services Tax (IGST) Act.

The DNPA stated, “In support of our issues, but without prejudice to our request for an absolute exemption from the levy of GST, DNPA has requested a decision of the GST Council vide which a disparity in the rates of GST applicable on printed books and their electronic versions i.e., e-books was rectified.”

DNPA, an association of leading media organizations, also stated, “Up until the GST Council‘s decision in 2018, while printed books falling under Heading 4901 were free from the GST levy, their electronic versions, i.e., e-books, were taxed at the rate of 18%. However, in 2018, the GST Council cut the GST rate for e-books from 18% to 5%. The DNPA believes that, at the very least, a similar line of action should be taken for e-papers, with the exemption becoming absolute in due order.”

In a letter dated July 22, I&B Secretary Sanjay Jaju urged Revenue Secretary Sanjay Malhotra to either abolish or lower the GST on these subscriptions from the current 18% to 5%.

Printed newspapers, journals, and magazines are now exempt from GST, however online news subscriptions, which are classified as Online Information Database Access and Retrieval (OIDAR) services, are taxed at 18% under the Integrated Goods and Services Tax (IGST) Act.

In the letter, Jaju stated that traditional newspapers are exempt from GST, emphasizing the significance of providing citizens with truthful and reliable information. He said that a similar adjustment was made in 2018, when the GST Council decreased the tax on e-books from 18% to 5%, so reducing the difference between printed books and their digital counterparts.

“In India, the number of paid subscribers to online news is quite modest when compared to the total number of internet users that access news. In this regard, it is observed that a higher GST rate on digital news subscriptions may skew further growth of the online news sector towards an advertising model, which may have an impact on the quality and credibility of news content on the internet through practices such as the use of clickbait and sensational headlines, as well as fake and misleading news, among other things,” the letter read.

The letter goes on to say, “Printed publications are excluded from GST in recognition of the importance of providing accurate and up-to-date information to the country’s residents. With India’s expanding internet penetration and the embryonic stage of the online news industry, it may be reasonable to treat online news subscriptions as equivalent to printed newspapers or ebooks for GST purposes.”

He added that the 18% GST on the Rs.120 crore online news subscription market generates around Rs.21.6 crore in tax revenue. As a result, lowering the GST rate on digital newspaper subscriptions from 18% to nil, or to 5% on par with e-books, may not result in significant revenue losses for the government.