Service providers like Oyo Rooms, Foodpanda and Airbnb received a ‘friendly’ query on whether they were paying service tax.Letters were sent to these aggregators to see if these firms were registered with the tax department.
The Indian government wishes a non-adversarial tax regime that's more welcoming to investors.
One of the officials told ET that most entities had registered themselves and some had sought further clarifications on procedures and processes as the provision dealing with this particular area is fairly new.
Foodpanda confirmed the news. “We did receive a query from the service tax department," a spokesperson said, adding “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.”
All aggregators have to pay tax of 14%, excluding the Swachh Bharat cess, which will be levied soon.
As per reports, the service tax revenue has risen 26% in the first seven months of the current fiscal from the year earlier.
As per the government’s provision, any aggregator that has office in India has to pay service tax if the service is so provided using the brand name of the aggregator in any manner.