Paid apps from Google and Apple might cost you more from next year

You could soon be shelling out more money to buy paid mobile apps from Apple and Google, thanks to additional taxes that the government is considering.

If the apps are included under the umbrella of the equalisation levy by the end of this year as er the government consideration, buying them would cost more from the next year onwards. The guidelines regarding the same would be issued by the end of this year.

As of now, the equalisation levy of about 6% is applicable on online advertisements from multinationals that are registered outside India. If these apps come under its ambit, it could increase the app prices by as much as 7 to 8%.

However, Central Board of Direct Taxes (CBDT) had already anticipated something like this in March this year, which is why the move would not be that surprising for the industry.

Also read: CBDT asks super-rich tax payers to declare cost price of expensive assets

As per industry experts, the government only needs to issue a circular which would cover apps in the first round of guidelines. "The government can always increase the scope of equalisation levy and bring more transactions under this," Ajay Rotti, partner at tax consultancy Dhruva Advisors, told ET.

"Given that the definition of 'online' includes services through any other form of digital network, there is a worry among the industry that even advertisements on TV - since most of it is on digital network - could attract the 6% levy," he added.