If you are a mobile content company, be prepared to pay service tax. The Union Budget presented today has added “development and supply of content for use in telecom and advertising purposes” in to the service tax net. This means when you negotiate revenue sharing arrangements with the telcos, you have one more thing to haggle for. Definitely bad news.
There is no change in service tax rates (12 per cent plus 2 per cent education cess), although the effective rate will go up since there is a new 1 per cent secondary education cess.
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