Kothari Rajesh

Taxability of revenue recd from the sale of app on Apple/Google Play store

Discussion created by Kothari Rajesh on Feb 25, 2014
Latest reply on Mar 3, 2014 by Kothari Rajesh

If one develops and sells an mobile app on Google Play Store or Apple Store for say Rs.100/-, Google/Apple will pay Rs.70/- to him after deducting 30% as transaction fee.

How does this income in the hand of app developer gets taxed in India?

1. Do we have to pay 12.36% Service Tax on Rs.100/- to Central Govt towards on reverse charge basis on sale of IT Software Services?

2. Do we need to pay 5% VAT on Rs.112.36 go State Govt towards sale of Packaged Software? If yes, whether to pay 5% as VAT or CST? Here, we don't know whether the customers are located in home state or other states or overseas.

3. Do we have to pay Withholding Tax (WHT) to Income tax on the payment received from a non-resident (Google)?

Is any other tax become payable on this revenue, apart from usual Income Tax?

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