BUSINESS

App Purchases On Apple, Google May Become 8% Costlier

Govt's 'equalisation levy' expected to extend to other digital transactions

11/07/2016 12:39 PM IST | Updated 15/07/2016 8:27 AM IST
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Mobile apps purchased on the Apple and Google app stores may be next in line to come under the government's digital economy tax, the 'equalisation levy', which could make app purchases up to 7 to 8 per cent more expensive, the Economic Times reported.

The additional tax could be put in place by the end of the year with related guidelines expected by December, ET reported.

Last month, India introduced the 'equalisation levy' – which imposes a six per cent tax on digital advertisements on international companies like Facebook and Google that provide digital ads to Indian businesses. International companies are widely expected to pass on the additional costs to Indian consumers, who already pay service tax, which in turn make e-commerce purchases more expensive.

According to the ET report, other digital transactions may eventually be brought into the fold of the equalisation levy.

The 'equalisation levy', which is aimed at taxing the digital economy, are also expected to hit other e-commerce transactions and startups, who primarily use digital advertising for marketing purposes.

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