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Service Tax for Adsense?

Indians ...


indias next no1

7:26 am on Feb 28, 2006 (gmt 0)

10+ Year Member

In to-day's budget speech, Indian Finance Minister levyed 12 % Service Tax on renting the space for advertisements, other than print media ( which is already covered under service tax ) , whether it means that we have to pay service tax for the money we earned through Adsense.

any idea?


7:44 am on Feb 28, 2006 (gmt 0)

5+ Year Member

no there will be not service tax on Google Adsense income because we are exporting the services so you should not worry Abbot service tax.


8:04 am on Feb 28, 2006 (gmt 0)

10+ Year Member

Well.. I had posted a query on this subjsct long back and talked with a CA regarding this. It seems that the closest we can get to any service taxable category is an advertising agency but since we are not the agency and we are only working on a commission basis we do not need to pay service tax. Just the usual personal tax rules apply.

indias next no1

8:27 am on Feb 28, 2006 (gmt 0)

10+ Year Member

indiangal : We are not exporting anything, we are just providing space for advertisements to google( and upto to me i am getting the money in Indian Rupees from google ), as we are not raising any invoice to google, we will not be able to levy the 12% service tax in that bill. If it's so, then as per tax rule we have to pay from our hand ie. if we receive Rs 100000 from
google we have to pay Service Tax Rs 12000 from our hand. If we raise invoice bill to google we can ask them to pay Rs 100000 ( the cost for the service ) + Rs 12000 Service Tax.

My question is : Upto the last year there was no service tax levyed on renting space for ads .
But now the FM levyed 12% tax for ad spaces other than print media, is it includes web advertisements


1:01 pm on Feb 28, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

There is no SERVICE TAX applicable as of today on Adsense earnings in India. I will post more in day or two with authentic source which i know but not able to find. It was cleared on Dec 13 when review batch of Service Tax judged that ADWORDS is liable for service tax to Google where as Adsense is not to its publisher. As far as i recall google asked for review of service tax applicable on which of its services and a batch of reviewer representing govt of india made decision against them i.e. adwords is liable for service tax.


1:08 pm on Feb 28, 2006 (gmt 0)

WebmasterWorld Senior Member jetteroheller is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

In Austria is since long time a similar tax for advertising in print medias.

So far, no Austrian internet publisher had to pay this tax.


5:47 pm on Feb 28, 2006 (gmt 0)

10+ Year Member

I think the adsense income will not come into service tax.

this is neither a service nor a product. it is kind of an affiliation. i am not sure if an affiliate program is taxable in service tax in india

it is covered in income tax anyways. anyone of you paying that? ( i am .. since begining )


11:03 am on Mar 2, 2006 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Here i am quoting with authorities information i have


Justice Syed Shah Mohmmed Quadri, Chairman, Shri Somnath Pal and Dr. B. A. Agrawal, Members


Ruling N. AAR/30/2005, dated 13-12-2005 in application number AAR/44/58/ST/2005

Advertising services - Service Tax - providing/selling space on 'Google Website' - Even by merely providing/selling space for display or exhibition of andvertisement, would be providing a service to the advertiser/clients - Covered by defination of advertising agency within Clause(e) of Sub section(105) of section 65 of finance Act 1994.. . . . . ..

It is printed in service tax review book 1st Jan. 2006 page 173 to 184.

To cut short on adsense

Adsense for Content: Under this methodology the website owner is an online publisher. . . . . .The publisher is paid a percentage of revenue earned by Google from the advertisers. . . . .

In observation number 3

It is also denied that 'Adsense for Search' and 'Adsense for content' result in providing add on services to the advertiser. It is submitted that no extra charges are to be paid by the advertisers for these services which are optional.

After reading all i can say this was especially for Adwords and with noting of AdSense that online publishers do not provide service to advertisers. The services are provided by Google. There is no clear mention though those publishers (online publishers) are exempted as this was for reviewing only Adwords services in India by Google.

indias next no1

12:46 pm on Mar 2, 2006 (gmt 0)

10+ Year Member

Kartiksh : thanks for your reply. You are quoting about "adwords" which is also as per Jan'1 2006.
But i am asking about the Finance Minister's Budget speech which levyed service tax on selling / renting ad spaces other than print media, i guess it includes our adsense! Whether you have queried about this with your Auditor? My Auditor doesn't have any idea about this as of now. If so , i let you all know.

I will be happy if there is no Service Tax, but i want to know whether we have to pay or not. That's why i have started this thread


6:00 pm on Mar 2, 2006 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

Seems like the answer is outside of our ability to answer here. Without a professional opinion, everything else we say here is speculation, and speculation is not a sound basis for a business decision.

Thanks for raising an important topic for discussion.


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