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Are Adsense earnings subject to service tax in India?

Date: 21 Mar 2015    Group: Blogging and Websites    Category: Advertising   

From October 2014, the online advertisements are subject to Service Tax. Accordingly, Adwords has started charging service tax from its clients. In the meantime, Google has started paying for the Adsense earnings only through wire transfer and payments are received in bank in bank account in India in convertible currency which bank converts into INR and credits to the website owners account. Google does not pay any service tax to the Publishers (ie website / blog owners)in the invoice generated. However, these ads are displayed in India and clicked in India.

The question that needs to be answered is whether such Adsense earnings are subject to Service Tax? Is there any clarification from Service Tax authorities?

Not sure whether service tax is imposed on Google AdSense earnings in India? Find out the answer to this query from our experts.

Author: Timmappa Kamat    23 Mar 2015      Member Level: Platinum     Points : 2  (Rs 2)    Voting Score: 0

Yes. As per Union Budget 2014, sale of ad units on website or mobile would attract a service tax of 12.36%. The service tax would be applicable on all kind of digital ads i.e. direct ad sales, Google Adsense ads, Ad sales through agents etc.

Author: Amit    24 Mar 2015      Member Level: Gold     Points : 1  (Rs 1)    Voting Score: 0

I think this article will give you a better picture of the new service tax rules governing online advertising income.

Author: Aman    26 Mar 2015      Member Level: Diamond     Points : 1  (Rs 1)    Voting Score: 0

The answer to your question is yes, Adsense earnings are subject to service tax in India.

Author: Muddassir    10 Apr 2015      Member Level: Diamond     Points : 1  (Rs 1)    Voting Score: 0

Adsense earnings are subject to service tax as well as income tax.

Author: haktuts    02 Jun 2015      Member Level: Silver     Points : 2  (Rs 2)    Voting Score: 0

As per the service tax act,Service Tax now applicable on all Digital Ads, the advertiser would be required to pay Service Tax to the publisher and the publisher will then deposit this Service Tax with the Service Tax Department.

As advertiser is going to pay the service tax amount to google and then google is liable to pay the similer service tax amount to service tax authority.
so,publisher need not required to pay the service tax to service tax authority to avoid the double taxation.

As per service tax act,tax is not applicable on the same declared income.

Author: Timmappa Kamat    03 Jun 2015      Member Level: Platinum     Points : 1  (Rs 1)    Voting Score: 0

The service tax has now been revised to 14%. It is applicable on digital ads as well.

Author: Shailendra Gayakwad    18 Nov 2015      Member Level: Bronze     Points : 2  (Rs 2)    Voting Score: 0

As between you and Google, Google is responsible for all taxes (if any) associated with the transactions between Google and advertisers in connection with Ads displayed on the Properties. You are responsible for all taxes (if any) associated with the Services, other than taxes based on Google's net income. All payments to you from Google in relation to the Services will be treated as inclusive of tax (if applicable) and will not be adjusted. If Google is obligated to withhold any taxes from its payments to you, Google will notify you of this and will make the payments net of the withheld amounts. Google will provide you with original or certified copies of tax payments (or other sufficient evidence of tax payments) if any of these payments are made by Google.
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Author: Mahesh    18 Nov 2015      Member Level: Diamond     Points : 8  (Rs 8)    Voting Score: 0

Publisher service earnings are different to that of Digital ads marketing earning. So if you are blogger or publisher then service tax doesn't apply for the publisher earnings.

Because Google adsense is sharing the ad revenue with you on 68/32 ratio basis. So you can't charge them service tax as it is not service but more of revenue sharing for ad placements.

However if you are a digital marketer and take campaigns for clients to do adwords ads then service tax applies on your service. And you have to create invoice for clients that reflects that charges.

Not just limited to Google adwords services, if you do ads for facebook or other similar sites for clients. Then any service that you charge clients with, then the service tax applies in that case.

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