GST will bust the ‘IT Act’ cover up for tech giants like Facebook and Microsoft

Goods and Services Tax (GST), the proposed national VAT to be implemented in India, may pose risk to internet platforms and tech giants like Facebook, YouTube, Twitter and Microsoft, since it will hold them responsible for the content published on their websites.

This contradicts the safe-harbour provision of the Information Technology (IT) Act, which has so far exempted these online platforms from being responsible for third-party or user-generated content. Since both acts differ in their definitions, it might cause some confusion when it comes to legal matters.

"The new GST Bill clubs all intermediaries as 'agents' who carry on the 'business of supply or receipt of goods and/or services on behalf of another' (emphasis added) and clubs these entities together with commission agents, brokers, etc," said a statement from the Internet and Mobile Association of India (IAMAI), the body representing tech giants including Facebook, Google, Flipkart and Microsoft.

The safe-harbour provisions under Section 79 of the IT Act of 2000 says that other than certain conditions, "an intermediary shall not be liable for any third-party information, data or communication link made available or hosted by him," which does not hold entities like Facebook, Twitter, LinkedIn and Zomato liable for the content that gets uploaded on their website or gets posted by users.

As per the new GST bill, an agent can be identified as "a person who carries on the business of supply or receipt of goods and/or services on behalf of another, whether disclosed or not, and includes a factor, broker, commission agent, ar hatia, del credere agent, intermediary or an auctioneer or any other mercantile agent."

This means that the websites, termed as agents, would be liable for the content.

As per IAMAI, the government needs to have a certain consistency with the definitions so that confusions in legal matters can be avoided.

Image source