MIB urges Finance Ministry to exempt or reduce GST on Digital News Subscriptions

The Ministry of Information and Broadcasting has urged the Department of Revenue to take steps to exempt digital news subscriptions from GST or reduce it to 5% from 18%.

“In a letter to the Department last month, the Secretary of MIB wrote to the Revenue Secretary in this regard, proposing that either the GST on digital news subscriptions be removed or be rationalised and reduced to 5% on par with that of e-books,” said a government official.

“With the increasing popularity of the internet in India and the recent development of the online news industry, it is requested that the disparity between GST on printed newspapers and digital/ online news subscriptions may be dealt with by either exempting the GST on the latter or rationalising it from 18% to 5% at par with that on e-books,” the letter reads.

At present, 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.

The matter may be addressed at the next 54th GST Council Meeting again, which is set for September 9. It was on the agenda for the 50th GST Council meeting on July 11, 2023, but the proposal was not recommended. Since then, the situation has remained unchanged.

Sources provide that the Information and Broadcasting Ministry believes that a higher tax rate will cause the online news business to shift toward an advertising-based income model, which may have a negative influence on the quality and authenticity of news material. Given the country’s growing Internet user base and growing online journalism sector, a GST exemption or rationalisation would be a great step. Print newspapers, journals, and periodicals are exempt from GST.

“The issue was first brought to the notice of the Information and Broadcasting Ministry by a news digital media body, after which it was investigated and has been taken up with the Finance Ministry,” stated the official.