From 1st of July, 2012 Service tax came into effect in India on Domain names (All TLD's) @ 12.36% (12% towards Service tax and 3% (of tax) towards education and Secondary & Higher Education Cess). Every entity who is providing services from India requires to pay service tax. (Details of service tax can be obtain from Govt. official website) As per law every Indian registrar/reseller/customer requires to charge service tax to their customers and resellers and then can pay difference to tax authorities, example : suppose if .IN registry sells a domain name at INR 100 and tax is 10% (for example) then every registrar will get it in INR 110. (These tax rates are for example only) Now there is two scenario A. Some Out of India based registrar counts their cost at INR 110 and sells their customers accordingly. They donot charge any further tax to any customer as they count that they are out of India and service tax is not applicable to them. B. Now if India Based registrar sells it to their customers, say in INR 130 then they require to charge service tax to their customers as mentioned in example above and their customer will get domain name in INR 130 Plus 10% tax as per example. So in customers hand domain name will comes at INR 143 , Now Indian Registrar when filing tax returns they will say INR 10 tax already paid by them at the time of purchasing the domain name from registry and they collected INR 13 as tax from customer so the registrar requires to pay the difference of only INR 3 To Tax authority. Service tax is applicable to every sale instance within boundaries of India if service provider is located in India. NOW Lot of questions are asked by customers and resellers about the same and how this tax will effect their sale etc.: Here is the detail : 1. If you are India based customer and reseller then this tax is unavoidable to you , No matter you purchase the product from Indian registrar or foreign registrar. .In registry charging service tax to all registrars irrespective of their country of origin. So No matter if it is Enom, Godaddy , resellerclub, Mitsu or Net4india everybody pays service tax on domain name in advance to .IN Registry. Now question arises that why some registrars are charging service tax and others are not charging to their customers/resellers ? Some of the registrars who donot have any physical presence in India like Enom are absorbing this tax into their cost and they are offering domain name to customer/reseller at a particular price and they are not further charging any tax to their customers and resellers. IMPORTANT :Now IF any India based reseller or customer purchases domain name from these out of India based Registrars then the India based customer or reseller requires to pay the service tax on purchase (import of services) and also requires to charge to their customers , for example if you (India based reseller or customer) buy .In or any other extension from out of India based registrar without paying any service tax then you require to pay the tax on purchases also (import of services) and while selling again you have to charge your customers and then you can ask for credit from tax dept. but this way you are charged more and compliance requirement comes on you. But if you are India based reseller or customer then simply purchasing a domain name with India based service provider is far better option as you will get tax certificate and you can also charge to your customer and requires to pay the difference to tax authorities. What about Mitsu? Mitsu have both options available to our resellers and customers. We are not charging any taxes to our out of India based customers but charging service tax to only India based resellers and customers. Very soon we have other options available. India Based customer or reseller can call us to get more details on this issue.