MUMBAI: The GST Authority for Progress Rulings (AAR – Maharashtra bench) has held that source of on the web games — despatched by an electronic mail attachment or by using a secure url — to consumers in India will appeal to goods and companies tax at 18%.
The applicant, Amogh Bhatawadekar, marketed online video games by means of a web page MMOPLAYSTORE.com. He procured on-line game titles from suppliers located in China and the US. The games were being stored on the cloud and then bought to shoppers, who paid as a result of PayPal.
He sought an advance ruling on several difficulties. To begin, with the AAR held that segment 2 (17) of the Integrated Products and Providers Tax (IGST) Act defines “online information and data-primarily based obtain or retrieval services” (OIDAR) to include things like online gaming. Thus, the on the web games (e-products) supplied by him would be considered as providers. More, even if the cloud is positioned outside India, the shoppers are in India and GST would apply.
On the other hand, owing to lack of precise particulars for figuring out the location of provide for OIDAR, the AAR did not give a ruling as regards the applicability of GST in case the buyers are from abroad and are remitting overseas trade.
As regards offer of the e-items to him, the AAR, in its buy dated December 15, held that in case of procurement from international suppliers and source from out of India, the applicant has to discharge IGST liability less than the reverse cost system.
The AAR dismissed the contention of the applicant that the e-merchandise are not obtained by him (seller) in India, but are saved on a cloud, that’s why these are unable to be regarded as to be imports in India and would be outdoors the purview of the reverse demand mechanism.