Domain registration Godaddy

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This discussion clarifies the tax implications of registering a domain name through GoDaddy in India. It addresses whether Section 195 of the Income Tax Act applies and if GST is payable as an import of service. The consensus is that TDS at 10% under Section 195 and GST under the Reverse Charge Mechanism (RCM) for imported services are applicable, even for new blogs with zero turnover. Purchasing from an Indian company avoids these specific tax requirements.

Swathi

Swathi (Querist)

30 July 2021 Dear experts,
I want to buy a domain name for my blog from godaddy. However, since it is a foreign company is sec.195 applicable?
Is gst also applicable as it will to amount to import of services.
Since it is a new blog, the turnover as of now is zero.

Could you let me know about the gst and income tax applicability for domain registration?
Thank you in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

30 July 2021 Now, the taxability of fees from domain name registration services has come under tax scanner. Recently, the Income-tax Appellate Tribunal, Delhi Bench (‘Tribunal’) has held that domain name registration fees received by Godaddy.com LLC[2] are taxable as royalty under Indian tax laws. A summary of the said Tribunal ruling is as under:

Deduct 10% TDS under section 195.
GST under RCM under import of service payable.

Swathi

Swathi (Querist)

30 July 2021 Dear sir,
If I buy the domain from an Indian Company and pay 18% gst, I am not required to deduct tds and reverse charge mechanism also will not be applicable right?
Correct me if I am wrong.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 July 2021 Yes, you are right....

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