Skip to main content

Aggregators Too Get a Service Tax Reminder

By
Taxman sends letters to new-age cos such as Foodpanda, Oyo Rooms and Airbnb to check if they are paying tax
Aggregators such as Foodpanda, Oyo Rooms and Airbnb have been asked whether they are paying service tax.
“Letters were sent to ascertain if these entities are registered with the department and paying due tax,“ said a department official.
This seems to be part of a `friendlier' approach to alert service providers of their potential liability, in line with the Centre's desire for a non-adversarial tax regime that's more welcoming to investors.
The official said most entities had registered them selves and some had sought fur ther clarifica tions on proceprocesses as the dures and processes as the provision dealing with this particular area is fairly new.
While the rapidly expanding sharing economy offers vast potential for tax revenue, the task can be challenging as in some cases there is no brick-and-mortar presence for these firms.
Foodpanda, which aggregates restaurant ordering, said it had got the letter. “We did receive a query from the service tax department,“ a spokesperson said. “The authorities have conducted an extensive review of our accounts and have found no irregularities so far. We are registered and duly pay our taxes,“ a FoodPanda spokesperson said. Hospitality aggregators Oyo Rooms and Airbnb did not respond to ET's questions.
All services attract tax at the rate of 14% (excluding the Swachh Bharat cess) unless it's included in a negative list or specifically exempted by the government. Service tax revenue has risen 26% in the first seven months of the current fiscal from the year earlier. It's budgeted to become the second biggest indirect tax in this fiscal, overtaking customs.
The government included a provision in the February Budget making it mandatory for such entities to register with the department and pay tax. This followed the Uber service tax case in Mumbai over the San Francisco-based, taxi-hailing app offering luxury cabs.
It also applies to entities that don't have any representative office in the country. “In respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India, is being made liable to pay service tax if the service is so provided using the brand name of the aggregator in any manner,“ according to the provision.
“If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator.“
Taxation of technologybased businesses has emerged as a significant challenge for policymakers worldwide. The OECD has worked out a plan to tackle taxation in the ecommerce space that countries will implement over time.
The Economic Times, New Delhi, 18th Nov. 2015

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more

Govt invites applications for RBI deputy governor's post, last date Nov 30

By
  The government has invited applications for the post of deputy governor of Reserve Bank of India from interested candidates with at least 25 years of experience and below 60 years of age as on January 15, 2025.One of the deputy governors, Michael Patra’s current term will end on January 15.According to an advertisement, candidates should have at least 25 years of work experience in Public Administration, including experience at the level of secretary or equivalent in the Government of India, or persons who have at least 25 years of work experience in an Indian or International Public Financial Institutions; or persons of exceptional merit and track record at the national or international level in the relevant field.The last date of submission of the application is November 30, 2024.   It has been clarified that the Financial Sector Regulatory Appointments Search Committee (FSRASC) – a body which will select the candidates- is free to identify and recommend any other person a...
Post a Comment
Read more