My company recently engaged in selling eBooks online. The process involves:
- Publishers upload eBooks (digital formats) to a central repository.
- Central repository = Digital Warehouse + Distribution engine for encrypted eBooks
- Retail eBookstore obtains its real-time inventory from the Central Repository to fulfill an eBook purchase by an end-user.
So, there are three entities -
- Publisher/ Copyrights Holder;
- Service Provider - Central Repository/ Digital Warehouse/ Distributor; and
- Retailer who has a catalogue of eBooks and who is actually delivering the book to an end-user, however, receiving it in real-time from the Central Repository.
My questions are, thus,
- if there is a Sales Tax/ VAT on eBooks/ Digital Books (which are not in the form of CDs/ DVDs)?;
- If yes, then who pays it - Central Respository or the Retailer?
- What are the other taxes applicable in the process?
Any guidelines and advise is greatly appreciated.