Foreign digital firms gear up for legal battle over retrospective GST tax demands
Some foreign digital subscription platforms, including news outlets and streaming companies, are gearing up for a legal battle against India's tax authorities over retrospective goods and services tax (GST) demands.
The dispute centres around alleged tax evasion for online services such as advertising, news subscriptions, music and movie streaming, and online gaming that fall under the Online Information and Database Access or Retrieval (OIDAR) category, which attracts the 18 percent tax slab.
As a result of the government's decision to remove OIDAR exemptions in October 2023, companies are now facing tax demands for services provided between 2017 and October 2023. These companies plan to contest the notices in their respective jurisdictions, a person familiar with the development said, requesting anonymity.
“The companies will file soon in (the respective) high court,” the person said, arguing that services such as online training and exams do not fit the OIDAR definition.
