Internet and Mobile Association of India(IAMAI) which was once rooting for the passage of the GST bill amendments is now rebuking the changes that have been introduced into the same. The new Goods and Services Tax(GST) Bill that will table in the upcoming monsoon session of the Parliament crushes the future of Internet economy in India.
IAMAI, if you’re unaware, is a not-for-profit industry body which counts companies such as Facebook, Microsoft, Google, Flipkart and Hungama as its members. Established in 2014, the IAMAI aims for expansion and enhancement in the online and mobile value added services sectors. It is now spear-headed by Freecharge founder Kunal Shah.
The new GST bill fails to recognize the heart of the issue and puts online intermediary platforms like Facebook, Google, Zomato and online review websites at the end of the barrel. The bill states that it will now hold the aforementioned online services responsible for the content they host.
According to the statement released by IAMAI,
The new GST Bill clubs all intermediaries as ‘agents’ who ‘carries on the business of supply or receipt of goods and/or services on behalf of another and clubs these entities together with commission agents, brokers, etc.
Now, lets take a look at the safe-harbors provision under the IT Act 2000 which states that the intermediary is not liable for any third party information, data, or communication link hosted on the website. This is simple terms means that Internet services, like Google, Facebook or Twitter are not liable for the content that their multi-million users post or upload on the platform.
But, the GST bill is in absolute contradiction with provisions for ‘digital intermediaries’ recognized by the IT Act stated above. It recognizes the above mentioned websites and platforms as ‘agents’ representing the users on their platform. Hence, they are liable for the content they post.
IAMAI further added that this bill, if imposed, will make doing business in India even more difficult than before. IT also says that,
This would effectively stop free and easy hosting services that the platform offers. Similar restrictions would be applicable for other services like social networking sites, online marketplaces, etc.
The GST bill that the government believes will pass with a majority, is an unpleasant surprise for online digital businesses. The bill fails to recognize the boom of Internet services and digital progress in India. It can ultimately be termed — a step back from the dream of ‘Digital India’ and ‘Startup India’ initiatives.
Thus, the government needs to address the elephant in the room — which is the inconsistency in the GST bill. They should work towards reinstating the safe-harbour provisions that are proposed in the IT Act.