Vat on ebooks

Others 2575 views 1 replies

My company recently engaged in selling eBooks online. The process involves:

  1. Publishers upload eBooks (digital formats) to a central repository.
  2. Central repository = Digital Warehouse + Distribution engine for encrypted eBooks
  3. 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 -

  1. Publisher/ Copyrights Holder;
  2. Service Provider - Central Repository/ Digital Warehouse/ Distributor; and
  3. 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,

  1. if there is a Sales Tax/ VAT on eBooks/ Digital Books (which are not in the form of CDs/ DVDs)?;
  2. If yes, then who pays it - Central Respository or the Retailer? 
  3. What are the other taxes applicable in the process?

Any guidelines and advise is greatly appreciated.

Replies (1)

VAT/ CST is applicable on every stage of sales. As far as Service Tax is Concerned,  this seems to get taxed under the category 'Online information and database retrieval Service' category.


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