Apple has decided to raise the prices of its App Store offerings by over 30% in India, while the UK is being hit by a roughly 25% hike following its withdrawal from the EU. Even Turkey has been affected by this move on Cupertino’s part. The changes are reportedly going to be implemented within a week.
The cost of apps in these selected regions have been increased based on currency exchange rates, taxes imposed by the corresponding governments, the cost of doing business there and other relevant factors. In India, service tax of 14%, Swachh Bharat Cess (SBC) of 0.5% and Krishi Kalyan Cess (KKC) of 0.5% are applicable on all taxable services.
The App Store raked in more than $28 billion in annual revenues in 2016. On this scale, earnings lost over even a marginally small percentage of tax such as the Krishi Kalyan Cess will make a massive difference in yearly profits.
What it means to users in India is that they will now have to pay Rs 80 instead of Rs 60 for every $0.99 app even though the exchange rate of the dollar against the rupee hasn’t hit so high. In the UK, the price of App Store items costing 99 cents in the US will be raised from £0.79 to £0.99.
To make up for this change, Apple will allow developers to lower the tags on their applications to £0.49 or £0.79, if they wish. But there’s no incentive for creators to do so of course. VAT (Value Added Tax) is already applied to the price of items in the App Store for EU and UK customers.
The final costs of iOS applications in the US change state to state depending on the taxable amount. So the rate displayed on iTunes content is the one users can expect to pay before taxes. App Store items in India will likely to be shown with added service tax, KKC and SBC.