Remove Or Reduce GST On Digital News Subscriptions, I&B Secy Asks FinMin. Here's Why

Given the small number of paid digital news subscribers in India compared to the total number of online news consumers, a lower GST rate could support the nascent industry.

The I&B Secy letter expressed concern that the higher GST rate on digital news could stifle the growth of the online news sector, pushing it towards an advertising-based model.

Source : Jonas Leupe/Unsplash

The Information & Broadcasting (I&B) Ministry has requested the Ministry of Finance to reconsider the Goods and Services Tax (GST) rate applied to digital news subscriptions. As reported by NDTV, In a letter dated July 22, I&B Secretary Sanjay Jaju appealed to Revenue Secretary Sanjay Malhotra to either eliminate the GST on these subscriptions or reduce it from the current 18 per cent to 5 per cent.

Jaju reportedly highlighted that traditional newspapers are exempt from GST, citing the importance of providing citizens with accurate and factual information. He pointed out that a similar adjustment was made in 2018 when the GST Council reduced the tax on e-books from 18 per cent to 5 per cent, addressing the disparity between printed books and their digital counterparts.

Higher GST Could Stifle Online News Growth

The letter expressed concern that the higher GST rate on digital news could stifle the growth of the online news sector, pushing it towards an advertising-based model.

This, Jaju argued, might compromise the quality and credibility of online news through practices like clickbait, sensationalism, and the spread of misleading information.

Lower GST Could Support Industry

Jaju further noted that, given the small number of paid digital news subscribers in India compared to the total number of online news consumers, a lower GST rate could support the nascent industry.

He emphasised that aligning the tax rate for digital news subscriptions with that of printed newspapers and e-books would be a fair move, especially with the growing penetration of the internet in India.

According to Jaju, the digital news subscription industry, valued at approximately Rs 120 crore, currently generates about Rs 21.6 crore in tax revenue at the 18 per cent GST rate. He argued that reducing the GST to 5 per cent or removing it altogether would not result in significant revenue loss for the government.