Published: May 2018
EBooks have only been around for 47 years or so. ‘Project Gutenburg’ created by Michael Hart in 1971 was the beginning of the process of book digitization. The oldest digital library in the world, Gutenburg, was created with the goal of making literary works available for free in the public domain. Though still at a nascent stage of market development, eBooks have slowly gained a foothold given their many advantages including easy accessibility, lower costs (compared to print books), and portability. The proliferation of the internet and the increasing thrust by governments across the world to move towards a digital economy have also contributed towards expanding the market for eBooks.
Reading habits in the digital age mirror the overall consumer preference for personalized, customized and interactive content, which eBooks are capable of delivering. This trend was first witnessed in developed economies but emerging markets are following suit too. A 2014 survey by the Chinese Academy of Press and Publication revealed that 58.1% of China’s reading population read digitally, which was an 8% increase from 2013, and more importantly, also marked the first time when digital reading surpassed paper reading by the reading population. India’s reading habits are likely to follow the same trajectory as China as more and more people come online. In fact, the 2015 Nielsen India Book Market Report revealed that 56% of the respondents surveyed in urban India bought at least one eBook a year and nearly half of these bought at least 3-4 eBooks a year, indicating a growing demand for digital books in India.
However, despite the positive externalities associated with inexpensive books, in terms of taxation, eBooks are not taxed at par with print books. This White Paper makes a case for leveling the playing field for physical books and eBooks in India as well as for making both eBooks and physical books zero rated – a system wherein the entire value chain of the product is exempt from tax, thereby allowing publishers to avail of the benefits of input tax credit and helping bring down costs.