GST @ 18% is charged and TDS @ 2% is deductible up on the Google Adwords advertisement expense.
The same is essential to find out that some publishers are advertising with the help of the Google entity which is enrolled in India and some of the advertisers are doing the same with the support of the Google entity enrolled outside India. GST @ 18% and TDS @ 2% shall be subjected to apply in both the cases irrespective of whether they are advertising via a Google entity located outside India or via a Google entity located in India.
But, the advertisers who use the Google entity registered outside India for publishing advertisements, are at the sight loss of an equalization levy of with the rate of 6% also said as Google tax shall be subjected to you when you are advertising via Google entity enrolled outside India. The same 6% equalization levy shall not be subjected to apply when you are advertising via a Google entity enrolled in India. Below is the explanation for these three:
GST Applicable on Advertisement by Google Ads
18% GST is subjected to apply on the Google Adwords Advertisement. The same is applicable no matter whether you are enrolled with the Google entity enrolled in India or with the Google entity enrolled outside India.
Promotion with Google Entity Enrolled in India
When you are enrolled within the Google entity enrolled in India then you are needed to furnish the charge of 18% GST and that shall be mentioned in the invoice. The advertiser could tell his GST No. to Google and avail the GST advantage of Input Tax Credit by intimating his GST No. to Google.
Advertisers utilizing the monthly invoicing payment settings can intimate their GST No. to Google through this link – https://support.google.com/google-ads/contact/billing_none
All the additional advertisers would insert their data by navigating to “Billing and Payments”, then tap on “Settings” from the menu on the left. In your “Payments Profile”, you can see a section called “India Tax”. An individual would file his GST No. here and shall have the update in Google Invoicing Records.
Advertisement with Google Entity Enrolled Outside India
18% GST shall be responsible to pay for the advertisers who are advertising with the Google Adwords enrolled outside India. Towards the case, Google will not levy 18% GST in the invoice but the advertiser will on his own need to furnish an 18% GST beneath the Reverse charge mechanism.
TDS on Advertising by Google Ads
While 18% GST is needed to be furnished on the Google Ads, A deduction of TDS with a 2% rate shall be done. The TDS will be subjected to apply when the advertiser is needed to get his tax audit performed by a CA. There is no need to do a tax audit for the small businesses and thus the same TDS compliance will not be subjected to apply to the small business.
The same is essential to find out that there is a difference between the GST and TDS. under the GST compliance the GST is to be imposed and the TDS would be deducted under the income tax act.
Also, GST is subjected to be paid over and exceeding the advertisement charges while the TDS @ 2% is to be deducted on the payment made to Google.
The same would be elaborated with the example: For eg: You spend Rs. 1,00,000 on Google Adwords. Towards the same concern, the GST and TDS shall be subjected to apply as:
| Google Ad Expense | INR 1,00,000 |
|---|---|
| (Add) – 18% GST (18% of INR 1 Lakhs) | INR 18,000 |
| (Less) – 2% TDS (2% of INR 1 Lakhs | INR 2,000 |
| Balance amount payable | INR 1,16,000 |
the publisher is needed to pay Rs 1,16,000 only. But in the case of Google, the same mentioned that you furnish Rs 1,18,000, and once the TDS of Rs. 2,000 has been deposited with the Govt., they shall furnish you a credit of Rs. 2,000.
TDS Depositing with Government
Beneath section 194C, Rs. 2,000 TDS is deducted and is needed to be deposited with the government via the publisher.
When the amount is deposited then the advertiser shall indeed specify the PAN no along with the Address of the Google Adwords reacted as:
PAN No: AACCG0527D
Entity Name: Google India Pvt Ltd
Address: No. 3, RMZ Infinity, Tower E
Old Madras Road, 4th and 5th Floor
Bangalore – 560016
Post to the TDS gets deposited and the TDS return gets furnished, a TDS Certificate in Form 16A shall be generated. The advertiser is needed to share the same Form 16A with Google via email or via courier.
For advertisers, monthly billing would email a digital copy of this Form 16A to collections-in@google.com
For advertisers along with the manual or automatic payments, they will courier the Form 16A including the covering letter specifying the 10 digit customer id to the provided address:
Google India Pvt Ltd,
9th Floor, Building 8, Tower C,
DLF Cyber City, DLF Phase 2,
Gurgaon, Haryana – 122002 India
6% Equalisation Levy on Ads Spends on Entities Enrolled Outside India
The equalization levy has been incorporated by the Indian Govt in Financial Year 2016-17 which is subjected to apply when the Indian advertiser advertises through the entity that is not being enrolled outside India.
6% shall be the rate of equalization levy and is needed to be furnished only on the advertisement expenses incurred outside India.
The commonly ad spends outside India are:
- Facebook Ads
- Linkedin Ads
- Twitter Ads
- Google Ads if enrolled with Google outside India
The concept of this equalization levy was to make the same foreign publishers register in India.
As this equalization levy is not subjected to apply to the entities enrolled outside India, the same is effective when the advertiser advertises with the entities enrolled in India as they shall be enabled to save a 6% equalization levy.
