The Ministry of Information and Broadcasting (I&B) has asked the Finance Ministry to reconsider the goods and services tax (GST) rate on digital news subscriptions. As reported by NDTV, I&B Minister Sanjay Jaju, in a letter dated July 22, appealed to Finance Minister Sanjay Malhotra to either abolish the GST on these subscriptions or reduce it to 5 percent from the current 18 percent.

Jaju reportedly stressed that traditional newspapers are exempt from GST and cited the importance of providing accurate and factual information to citizens. He pointed out that a similar adjustment was made in 2018 when the GST Council reduced the tax on e-books from 18 percent to 5 percent to address the disparity between print books and their digital counterparts.

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Higher GST could slow growth in online news

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

This, Jaju argued, could undermine the quality and credibility of online news through practices such as clickbait, sensationalist journalism and the spread of misleading information.

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Lower GST could support industry

Jaju also 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 emerging industry.

He stressed that bringing the tax rate on digital news subscriptions into line with that on print newspapers and e-books would be a fair step, especially given the increasing penetration of the internet in India.

According to Jaju, the digital news subscription industry, estimated to be worth around Rs 120 crore, currently generates around Rs 21.6 crore in tax revenue at a GST rate of 18 per cent. He argued that reducing GST to 5 per cent or abolishing it completely would not mean a significant revenue loss for the government.