Wednesday, July 24, 2024

Apple App Store Purchases Get Costlier In India Owing To This Tax Law

Apple App Store is getting pricier in select markets owing to new changes in its existing tax and price policy for apps and in-app prices. The Cupertino-based tech giant has recently announced on its developers’ website that it will soon be charging more for apps by increasing their App Store prices in 6 countries including India, Indonesia, Russia, South Africa, Columbia and Brazil.

“When taxes or foreign exchange rates change, we sometimes need to update prices on the App Store. In the next few days, prices of apps and in-app purchases (excluding auto-renewable subscriptions) on the App Store will increase in Brazil, Colombia, India, Indonesia, Russia, and South Africa,” stated the Apple Developer Website on October 26, 2020.

App Store Tax and Prices Change For Indian Users

Talking about the Indian market, iPhone manufacturer has announced an additional equalisation levy of 2% to the existing GST, or the Goods and Services Tax of 18% in the country. It is also worth noting that the Apple app price rise in India has been credited to a particular tax law in the country that came into effect earlier this year.

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News18 has explained that the equalisation levy is a form of direct tax that the government introduced in 2016. It was passed with the intention of taxing the foreign tech companies on revenue accrued via digital transactions in the country.

Consequently, Finance Act 2020 levies a 2% equalisation levy on e-commerce operators under the section 165A. The new price chart for iOS developers has also implied that the tech giant would now charge a minimum Rs. 89 (from the earlier minimum price of Rs 80) on all apps on the Apple App Store.


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Notably, the biggest jump in App Store prices is expected to be witnessed by iOS users in Indonesia. Apple has added that it will soon levy a new value-added tax of 10 per cent in the country for developers based outside of Indonesia.

Additionally, all app prices as well as charges for in-app purchases will also be adjusted in Albania and Iceland to better align their App Store prices with pricing used in other markets selling in US dollars with value-added tax. However, this particular price change will most likely not affect the auto-renewable subscriptions.

Developers can now also check out the updated price tier charts on the Apple Developer website.As these Apple App Store price changes come into effect, My Apps “Pricing and Availability” section will also be updated to adjust your proceeds accordingly.


Moreover, Apple has also added that users can change the price of their apps and in-app purchases (including auto-renewable subscriptions) at any time through App Store Connect and may even choose to preserve prices for existing subscribers. However, we aren’t yet clear if the new tax and price changes will also be placed on Apple services like Apple TV+, iCloud and Apple Music.

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