Government Rejects Google Plea On Service Tax Issue

Business Standard: A government quasi judicial body has dismissed Google’s plea on service tax saying the search engine giant’s advertsing sales is subject to service tax. In the last Union Budget, the government had brought a provision to tax online advertising earnings including Adsense. Service tax in India is at about 12.24 per cent including surcharges.
In December last year, Google Online India had approached the Authority For Advance Ruling, a quasi judicial body within the Finance Ministry, to seek a clarification whether online advertising services was liable to the tax. The Authority had ruled that Google India had to pay service tax as its activity of selling space on its site is tantamount to providing a service to advertisers and clients.
The company again in its application in July this year sought a review of this earlier ruling, which has been dismissed. Now it’s clear that advertising sales on the Internet is subject to service tax.
Related:
Google Adsense Publishers Brought Under 12 Per Cent Service Tax Net

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