Hosting provider companies to charge service tax from Indain customer :- Well, now buying the hosting of a website will be the expensive material as the hosting company has started implementing the service tax. And, the US-based hosting provider DigitalOcean even started implemented the service tax that was introduced by the government for online games, software, movies, and music from last month. According to the reports, the DigitalOcean have applied 15% tax to non-business consumer bills from this month itself. However, the company has offset the cost for the first month by crediting the same amount to users. The storage hosting provider mentions that it will pay the tax collected from Indian customers to the relevant tax authorities.
Meanwhile, the new service tax law was implemented from the 1st of December and most of the companies were supposed to follow the new rule as soon as possible. The services tax will be charged on the based of the location of the service receiver, as opposed to based on the location of the service provider.
And, it clearly mean the company that is working on the idea have to pay 15% service tax for each transaction for their every singe transaction with the Indian customer. The tax will be charged for providing the services like advertising on the internet, provisioning books, movies, music, providing cloud services, software, etc., providing data or information, online gaming, etc.
However, the stats shows that it is the first week of year and still other companies are not implementing the service mainly because they are not aware of the new service taxes but it will be interesting see how the Indian government will make the other foreign company pay service tax for providing hosting in India.