According to the new GST Bill, digital intermediaries are no different from other types of business agents, which means internet companies will no longer be eligible for safe-harbour provisions provided under Section 79 of the Information Technology Act.
The safe-harbour provision of the Act states that the intermediary's role has to be "limited to providing access to a communication system". "If internet companies are now recognised to be 'carrying on the business on behalf of another', according to the GST Bill, they will be held responsible for the hosted content on their platforms," said IAMAI, which represents giants such as Google, Flipkart, Facebook and Airtel Money.
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These restrictions would be applicable to social networking sites, online marketplaces, etc, and it could have a detrimental impact on free and easy hosting services such as YouTube. In short, doing business in India just got complicated for internet service providers, the industry body added. Internet services such as Facebook, Twitter, Instagram, YouTube and Snapchat let users upload and share content, including text, pictures, audio files and videos on their platforms. The provisions in the GST Bill will make these internet services, which host content from third parties, liable for the contents hosted by the users.
"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' (emphasis added) and clubs these entities together with commission agents, brokers, etc," said IAMAI.
'Kerala backs out of GST commitment'
Kerala has backed out of its commitment to support the Goods and Services Tax (GST) bill, Chairman of the Empowered Committee of State Finance Ministers Amit Mitra said on Tuesday. "Finance Minister of Kerala Thomas Issac had supported the bill in the recent meeting held in the city, but now they said they were trying to arrive at a consensus," Mitra, who is also the West Bengal's finance minister told the State Assembly.