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Apple App Store Apps Purchases May Become More Expensive In India, Because Of A New Tax

Apple App Store Apps Purchases May Become More Expensive In India, Because Of A New Tax

Apple would charge an equalization levy of 2 percent in addition to the existing goods and services tax of 18 percent on apps on Apple App Store.

Apple has announced that prices of apps and in-app purchases on the App Store will increase in India and at least five other countries including Brazil, Colombia, Indonesia, Russia, and South Africa. As per the details shared by the company on its developer website on Monday, the increase in the App Store app prices in India will reflect the new equalisation levy of two percent in addition to the existing 18 percent goods and services tax. To recall, the equalisation levy is a form of direct tax that the government introduced in 2016 with the intention of taxing the foreign tech companies on revenue accrued via digital transactions. In the Finance Act 2020 that came into effect on April 1 this year, the government had levied 2 percent equalisation levy on e-commerce operators under the section 165A. Moreover, foreign developers in Indonesia will bear the burden of an additional 10 percent tax, the company added.

The updated pricing will reflect on the Apple Developer portal in the Pricing and Availability section of My Apps once these changes go into effect. The changes would likely occur in the coming weeks. "When taxes or foreign exchange rates change, we sometimes need to update prices on the App Store," Apple on the developer website explained. Once the changes in pricing come into effect, developers can update App prices and in-app purchases rates (including auto-renewable subscriptions) at any time in App Store Connect. At the moment, it is unclear whether Apple's own services in India such as Apple Music, Apple TV+ and iCloud would also witness a change in subscription rates.

It is safe to assume that the updated pricing details will be conveyed to customers once they're into place. Additionally, prices of apps and in-app purchases (excluding auto-renewable subscriptions) will also be adjusted in Iceland and Albania to align with pricing used in other markets selling in US dollars with value-added tax. Apple has also provided developers with the updated price tier charts to show the revised pricing for their particular apps. The pricing charts for developers highlight that Apple would charge minimum Rs. 89 on apps on the App Store. The company last updated App Store prices in 2017 when the minimum price of apps was set at Rs. 80 in India.


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