Query about service tax
This query is : Resolved
02 September 2013
Query About Service Tax...
Is Facebook and Skype under Service Tax in India?
On what revenue Service tax is levied...
Is Facebook and Skype under Service Tax in India?
On what revenue Service tax is levied...
CA Vijeta Verma
(Expert)
03 September 2013
As far as my knowledge is concerned they are out of the purview of service tax liabilty.As they are service provider of foreign country and they are not providing services to a single entity/person/country.If any law governs them it would be based on there own country of origin
10 August 2024
### **Service Tax on Facebook and Skype in India**
**Service Tax Background:**
Service Tax was a tax levied by the central government of India on services provided. However, it has been subsumed under the Goods and Services Tax (GST) regime since July 1, 2017. As of GST implementation, service tax is no longer applicable.
### **Pre-GST Era (Before July 1, 2017)**
**1. Facebook:**
- **Nature of Service:** Facebook provides online advertising services to businesses in India.
- **Service Tax Applicability:** Advertising services were subject to service tax. Therefore, if a business or individual was using Facebook for advertising and the service was provided in India, service tax would have been applicable.
**2. Skype:**
- **Nature of Service:** Skype provides communication services, including voice and video calls.
- **Service Tax Applicability:** Communication services such as telecommunication services were subject to service tax. For calls and services provided to Indian residents, service tax would have been applicable on the charges.
### **Revenue and Service Tax**
**1. **Threshold Limits:**
- **Service Tax was applicable:** Generally, service tax was levied on the gross value of services provided. For businesses, service tax was applicable if the taxable service exceeded the threshold limit specified by the law.
- **Threshold Limits:** Service tax had various thresholds and exemptions based on the nature of service and the size of the business.
### **Post-GST Era (Since July 1, 2017)**
**1. **Applicability of GST:**
- **Subsumed Service Tax:** Service Tax has been replaced by GST under the GST regime.
- **GST on Services:** Both Facebook and Skype, as service providers, fall under the GST regime. Services provided by these entities are now subject to GST.
**2. **GST on Facebook:**
- **GST Rate:** Advertising services provided by Facebook would attract GST at the applicable rate (18% as of the current GST rates).
**3. **GST on Skype:**
- **GST Rate:** Communication services like those provided by Skype are generally subject to GST. The rate can vary based on the nature of the service but often falls under 18% GST.
### **Procedure for Taxation**
**1. **Revenue on which Tax is Levied:**
- **Pre-GST:** Service Tax was levied on the gross value of services.
- **Post-GST:** GST is levied on the value of services provided.
**2. **Tax Compliance:**
- **For Businesses:** Businesses receiving services from foreign providers like Facebook or Skype must comply with reverse charge mechanism under GST if applicable.
- **For Individuals:** Individuals typically do not have to worry about the direct compliance for GST on such services unless they are purchasing advertising services or using communication services for business purposes.
### **Summary**
- **Pre-GST:** Facebook's advertising services and Skype's communication services were subject to service tax.
- **Post-GST:** Both Facebook and Skype services are now subject to GST. The applicable GST rates should be verified according to current GST provisions.
- **Revenue on Taxation:** Taxes were/are levied on the gross value of services provided.
For precise guidance and updates, especially if there are recent changes or specific cases, consulting a tax professional or referring to the latest GST notifications is recommended.
**Service Tax Background:**
Service Tax was a tax levied by the central government of India on services provided. However, it has been subsumed under the Goods and Services Tax (GST) regime since July 1, 2017. As of GST implementation, service tax is no longer applicable.
### **Pre-GST Era (Before July 1, 2017)**
**1. Facebook:**
- **Nature of Service:** Facebook provides online advertising services to businesses in India.
- **Service Tax Applicability:** Advertising services were subject to service tax. Therefore, if a business or individual was using Facebook for advertising and the service was provided in India, service tax would have been applicable.
**2. Skype:**
- **Nature of Service:** Skype provides communication services, including voice and video calls.
- **Service Tax Applicability:** Communication services such as telecommunication services were subject to service tax. For calls and services provided to Indian residents, service tax would have been applicable on the charges.
### **Revenue and Service Tax**
**1. **Threshold Limits:**
- **Service Tax was applicable:** Generally, service tax was levied on the gross value of services provided. For businesses, service tax was applicable if the taxable service exceeded the threshold limit specified by the law.
- **Threshold Limits:** Service tax had various thresholds and exemptions based on the nature of service and the size of the business.
### **Post-GST Era (Since July 1, 2017)**
**1. **Applicability of GST:**
- **Subsumed Service Tax:** Service Tax has been replaced by GST under the GST regime.
- **GST on Services:** Both Facebook and Skype, as service providers, fall under the GST regime. Services provided by these entities are now subject to GST.
**2. **GST on Facebook:**
- **GST Rate:** Advertising services provided by Facebook would attract GST at the applicable rate (18% as of the current GST rates).
**3. **GST on Skype:**
- **GST Rate:** Communication services like those provided by Skype are generally subject to GST. The rate can vary based on the nature of the service but often falls under 18% GST.
### **Procedure for Taxation**
**1. **Revenue on which Tax is Levied:**
- **Pre-GST:** Service Tax was levied on the gross value of services.
- **Post-GST:** GST is levied on the value of services provided.
**2. **Tax Compliance:**
- **For Businesses:** Businesses receiving services from foreign providers like Facebook or Skype must comply with reverse charge mechanism under GST if applicable.
- **For Individuals:** Individuals typically do not have to worry about the direct compliance for GST on such services unless they are purchasing advertising services or using communication services for business purposes.
### **Summary**
- **Pre-GST:** Facebook's advertising services and Skype's communication services were subject to service tax.
- **Post-GST:** Both Facebook and Skype services are now subject to GST. The applicable GST rates should be verified according to current GST provisions.
- **Revenue on Taxation:** Taxes were/are levied on the gross value of services provided.
For precise guidance and updates, especially if there are recent changes or specific cases, consulting a tax professional or referring to the latest GST notifications is recommended.
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