GST on Google Ads Revenue for Indian Merchants

GST is not applicable to indian businesses, provided that the income is received in USD.

Nature of Service Youtuber provide online services through internet. As per Sec 2(17) of IGST Act, “online information and database access or retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as- (i) advertising on the internet; (ii) providing cloud services; (iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; (iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network; (v) online supplies of digital content (movies, television shows, music and the like); (vi) digital data storage; and (vii) online gaming. Google places ads on the content shared by the content owner or the youtuber who in turn gives right or permission to Google to monetize content by placing ads. This constitutes supply for which youtuber is paid. Thus a youtuber provides a taxable service to AdSense. Place of Supply Google AdSense or the contracting agency is Singapore based i.e. Google Asia Pacific, Singapore. Considering Sec 13 of IGST Act, place of supply shall be the location of the service recipient i.e. outside India. Whether such a service can be considered as export? For this, we have to check the conditions as laid in Sec 2(6) of IGST Act which says export of services’ means the supply of any service when,- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India]; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct persons. So if I am providing service as a youtuber (supplier located in India) to Google Asia Pacific, Singapore (Google AdSense- supplier located outside India), receiving payment in convertible foreign exchange ($) and I and Google are not merely establishments of a distinct person it would mean I am exporting services. Whether such Export can be considered as Zero rated supply? According to Sec 16(1)(a) Zero rated supply includes the export of goods or services or both. It means youtuber provides zero-rated services to Google AdSense for running advertisements on his YouTube video. Registration requirement Since the youtuber provides exempt services i.e. services attracting 0% tax, he is covered under sec 23 of CGST Act and therefore not liable for registration provided he does not provide any other taxable service. However, GST registration shall be required if total value of services provided by the youtuber exceeds Rs 20.00 Lakhs during the year. Conclusion Thus if youtuber receives income only from Google Adsense, he is not liable to pay GST. Tags: goods and services tax, GST

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