Re: [LIS-Forum] Service Tax of 12.36% on Online information and databases

---------- Forwarded message ---------- Date: Thu, 18 Oct 2012 18:36:03 +0530 From: atanu This approach may need to be examined by the experts (such as taxation and financial management experts). However, on examination of broad parameters of service tax, lobbying with competent authorities may not be the most effective method. Service tax is defined as " the provision of services provided by service providers within India or services imported by Indian from outside India". By this definition, online database is a service. Online database is not confined to database services in information industry. Therefore, blanket exemption of service tax may lead to exclusion of all industries including financial services industry that heavily use online databases. A common practice by the Government is to offset service tax by increasing the funding. Other methods are available as well. Making something available for free or exemption of royalty, taxes, fees and charge may not be the most effective way to promote access and usage in all the cases. Open access proponents tend to miss the point that somebody pays for the access. It is quite possible this service tax will help in making journals open access. On Thu, Oct 18, 2012 at 12:24 PM, G.K.MANJUNATH wrote:

As per the Govt circular, based on the Finance Act, 1994, all 'Online and off-line products' will now attract a service tax of 12.36%. Earlier these products / services were under negative list. Such a change in the policy will put pressure on the already constrained library budget.

In view of this policy change, most of the vendors have postponed forwarding subscription to the publishers with an assumption the Govt may withdraw the change and it seems have also made representation in this regard.

As we are gearing up for next year renewals, the matter will be of serious concerns to all of us. Please refer to section 75 of the below mentioned circular :

http://www.servicetax.gov.in/st-act-upd-dec10.pdf

It says "on-line information and database access or retrieval" means providing data or information, retrievable or otherwise, 5[to any person], in electronic form through a computer network"

Our regular vendors have already indicated that, henceforth, libraries need to pay a service tax of 12.36% for renewing online journals and databases.

I highly appreciate further debate on this issue. Can our associations and consortia coordinators, take up this matter immediately with the concerned Department/ Ministry to seek exemptions ?

thanks,

Dr.G.K.Manjunath Chief Librarian Indira Gandhi Inst of Development Research Film City Road Santosh Nagar Goregaon(East ) MUMBAI - 400 065 India Phone: 022-28416528 email: gkm@igidr.ac.in