Service Tax on Google Adsense Earnings in India

[neelkumar]

Is service tax applicable on Google Adsense income in India. I receive commissions in USD. Am I liable to pay service tax. As per recent notification sale of space other than print media is liable for service tax.

[Green_Grass]

One prime requirement to pay service tax is that you should raise an invoice on Google and charge them service tax. This requirement cannot be met as the payment is more in the nature of a revenue share rather than a payment for advertising space with a fixed charge.

The recent Service tax ruling on Google adwords being subject to service tax, does not apply here as the publishers donot have any control over the price to be charged.

If and when G adwords is shifted to India office of G , they will have to pay service tax. As they currently bill from U.S. they are not currently liable to service tax.

As publisher , you should show revenue from G as income from your website and not as income from G.

Avoid unnecessary complications with service and income tax authorities.

Of course , a few chartered accountants have a different idea. They feel it is liable for service tax , because adwords is . But they forget the crucial difference between the two and the country of billing.

As and when the govt. authorities clarify the issue , we will know better. Currently situation is a little vague.

[kartiksh]

in simple answer No. you can dig this forum for previous post related to this topic

there are two link i found for you by sitesearch
[webmasterworld.com...]
[webmasterworld.com...]

[neelkumar]

This tax gets applicable from May 1st as these services have been included from May Ist only.

As per my CA we need to pay the service tax immediately even if we dont raise the invoice because we get the invoice at the end of every month.

[kartiksh]

Can you ask your CA in which clause this has been covered. notification details etc will be appriciated.

thanks

[Green_Grass]

Pls ask your CA how he came to this startling conclusion?

Especially when you are not required to pay unless your billing crosses Rs 400,000.

Also service tax is paid quaterly and returns filed 6 monthly.

Also how do you raise the invoice every month?

Do you send the invoice to Google by courier every month?

I thought G was paying at its own discretion, a portion of the revenue being generated.

Explain carefully to your CA how the system works. Most CA's don't even know what we are discussing.

[neelkumar]

What in case the earnings are above RS 4,00,000. Secondly, service tax is payable monthly on 5th of every month.

As per the latest ruling

"Sale of space or time for advertisement, other than in print media" is subject to service tax.

We are selling our space to Google so we are covered in this clause.

We are not raising any invoice i.e. true but Google generates an invoice monthly in Adsense reports and we finally know what is the invoice value.

[kartiksh]

"Sale of space or time for advertisement, other than in print media" is subject to service tax.

This is adwords. Read the judgment whose portions were quoted by me in another thread. The judgment itself contains clarification on AdSense. Anyway as martini wrote, it’s beyond the discussion scope of this forum. Let it be to CAs.

Explain carefully to your CA how the system works. Most CA's don't even know what we are discussing.

Very well said. I too of similar views.