Web Hosting Business! Factors That Could Damage It
Web hosting business
services generally enable individuals and organizations to make their website
available over the internet. At its simplest, web hosting business services
involve the storage of data on a server of the service provider. When electronic
device (e.g. a computer) sends request to view the client’s website. Then host
server sends a copy of the client’s stored web page to the electronic device.
The Webhost Infrastructure
A web hosting business company should be as stable and reliable
as their infrastructure. Web hosts should
develop one of the highest quality and most reliable infrastructures in
the web hosting industry.
Company purchases and maintains its own equipment located in the same city as
their management facilities.
Place of supply
The principal rule with regards to place of supply for services
providing Web host is where the supplier
belongs. In this context, if the supplier of web host services
belongs to Pakistan. Such services follow GST at a standard rate. On the other
hand, if the supplier belongs to another country, the supply of service is an
out of scope supply. However, if the recipient of the overseas services
supplier belongs to Pakistan. Then it considers an imported service and subject
to GST at a standard rate and the recipient
has to account GST as if he/she supply to
himself.
Bandwidth overage
Bandwidth overage is
where the volume of data that the website transmits has gone above the allotted
amount bandwidth. When this situation arises, some
web hosting business
companies will switch off the website while others will
automatically add on extra bandwidth charges
which are priced at a different
(usually much higher) rate than the normal monthly hosting charges. These extra charges don’t
penalize the customer , instead, they are to cover the cost that the web hosting company has to
compensate for the extra bandwidth quota.
On that account, bandwidth overage is subject to GST at a standard rate.
Govt. Taxes
Some countries require
you to charge a sales/use tax on certain services. It is best for you to take a
look at your state-specific Department of Revenue site to find out. If you need
to charge sales/use tax you will need to get a sales/use tax permit.
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