Adsense Vs Servicce Tax Rules In Inda

This is the reply we have got from an export on caclubindia.com website and it directs us to find a comprehensive way to save our service tax on the earnings gained by google adsense program.  This post is a  reply of our earlier post, which u can read by click here


AMIT
( Expert )
04 January 2011
Hi,

1. You need to follow mercantile system of accounting in case of pvt ltd company. You can book your revenues initially on a monthly basis if volume is low or on daily basis if volume is high.

2. In the second query, assuming the google ad sense is a foreign company, your service will fall under export of service and you need not pay any service tax on the same so far as you are receiving your consideration in convertible foreign exchange.

Regards
CA Amit Mundhra


Priya R
( Author )
04 January 2011
Dear Sir, Thanks for your input.

Further, i would like to add that Google issues cheque in INR and amount is not received in convertible foreign exchange. Want to know ST impact on the company?

Thanks for your help in advance


AMIT
( Expert )
04 January 2011
Hi,

To Claim exemption from service tax in case of export of services, amount should be received in convertible foreign exchange. If the amount is not received in foreign exchange, service tax will be payable.

Regards

CA Amit Mundhra


Vivek Raju P
( Expert )
04 January 2011
Amit what category under service tax will this fall into. Also this is a service provided to an intermediary and not a final customer and will service tax be applicable. Will the service be deemed to have rendered in India.

Pls advice


AMIT
( Expert )
05 January 2011
Hi Vivek,

I think the best possible category will be Advertising Time or Space Service as the person is providing Google a space on his website for displaying of some advertisements.

A second view can also be taken as google clarifies that google ad sense payments are commission from google from its advertising revenues. In that case it may be taken in Business Auxiliary Services.

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