Are you from India and registered or renewed some domain in last one year then you should know how much taxes they are taking these days in final check out. I started domaining in 2010 and brought a lot of domains in the following years. In the International market, the price of domains has not increased since then but now in India, it almost doubled the price of .com extension. As I can remember in 2012 the average price of a top-level domain from GoDaddy was INR 350 but as of October 2018, it takes more than INR 800 to renew or register a top level domain.
For larger companies or top sites it should not be a problem but what about the bloggers and other freelancers who experiment with domains and using different ideas. They often need to buy domains for a new idea if the site gets a little bit popular they get their money back but as of now, 99.99 % domain and web business idea fails. So why not imposing after they get something out of their domain.
Another big question is that bloggers and freelancers often flip or resale their domain for higher value. And in today’s market, they need to pay anywhere between 15-30 % commission on that transaction. And after selling they need to pay income taxes. So the question is Do you charge GST on domain sales of your own. especially high (end use) sales? I generally follow this domain name market weekly and never seen anyone asking for GST on Flippa.
What We can do to avoid GST on domains and Hosting?
Ahh we can certainly get our domains from us or internation version of domain registers website like using www.godaddy.com insted of in.godaddy.com. But legally you need to have a legal US address and a US payment processor to pay your bills.
Is that easy? no of course not.
The Indian government recently enforced a historic major overhaul of the legal system by implementing the goods and Services Tax (GST). With the arrival of GST, the sooner taxation regime has been replaced with a comparatively easier (albeit complicated in its own right) tax structure.
GST rate on domain names has been fixed at 18% by the Government of India. Domain names are neither consumer goods nor luxury goods. Domain names are the foundation upon which the modern-day commercial, social and beneficial activities are built up. Today anyone seeking any information on any human affairs resort to websites. Whereas a large part of the business activities are increasingly being occupied by e-commerce, the role of domain names can never be underestimated. Apart from private business houses, the Central and State Government departments have innumerable websites to provide benefits to the citizens. There will be an unending flow of new entrants in the field in the future. The government should promote these all-pervading activities, rather than discourage it. When the government itself is encouraging digitization, the creating of websites should be encouraged. The high rate of tax on domain names is prohibitive for development of internet activities. So the Government should think over it, treat domain names as a special category of goods and reduce the tax rate. At least the rate on domain names should be at par with e-books, which is at present taxable @ 5%.
Indian Government is already making it very hard for freelancers so Do we really need this kind of appreciation from our own government?