Services tax on whatapp/Facebook
This query is : Resolved
Shefil Vhora
(Querist)
17 April 2016
Can Indian Government collect tax from whataap or Facebook?
under which section it leveed?
if No why No?
Message likes :
1 times
CA Mehta Ankur N.
(Expert)
17 April 2016
No, because facebook & Whats app dont charge for their application .
Shefil Vhora
(Querist)
17 April 2016
But sir Facebook makes money a number of ways however advertising is the company's revenue channel. With self-serve ads becoming a booming business for Facebook and with the growth of Engagement Ads, Facebook could be on track to generate up to $1 billion in revenue this year.
so any income genrat
25 July 2025
Great point! Here’s how service tax (and now GST) applies to platforms like **Facebook and WhatsApp** in India:
---
### 1. **Tax on Facebook / WhatsApp – Basics**
* **Facebook and WhatsApp themselves do not charge users for using the basic app/service.** So, no direct tax is charged on users for just using these apps.
* However, **Facebook earns revenue mainly through advertising services** — selling ad space to Indian businesses or advertisers.
* These **advertising services provided to Indian advertisers are taxable under Indian GST law** (service tax earlier, now GST).
---
### 2. **Service Tax / GST on Facebook’s Advertising Services**
* When Facebook sells ad services to Indian businesses (advertisers), these are treated as **"Online Information and Database Access or Retrieval Services (OIDAR)"** under GST.
* Facebook is a **foreign service provider**, so the **Indian advertiser is liable to pay tax under the reverse charge mechanism** (i.e., the advertiser pays GST to the government, not Facebook directly).
* Under **service tax regime**, similar rules applied — Indian advertisers had to pay service tax under reverse charge on advertising services provided by foreign digital platforms.
---
### 3. **Why WhatsApp is not directly taxed**
* WhatsApp **does not currently charge fees for its app or any paid service**, so no tax is charged on usage.
* If WhatsApp introduces paid features (e.g., WhatsApp Business services with fees), those may become taxable under GST.
---
### 4. **Legal Provisions**
* **Under Service Tax (pre-GST):**
* Section 66A (Service Tax on services provided by foreign service providers)
* Rule 7(1) of Service Tax Rules (Reverse charge on services provided by foreign entities)
* **Under GST (current law):**
* Entry related to **OIDAR services**
* Reverse charge mechanism under Section 9(3) of CGST Act
* Place of supply rules under IGST Act
---
### Summary:
| Service | Taxable? | Who pays? |
| -------------------------------------------------- | --------------------- | ---------------------------------- |
| Using WhatsApp / Facebook app (free) | No | N/A |
| Facebook Advertising Services to Indian businesses | Yes (GST/Service Tax) | Indian Advertiser (Reverse Charge) |
---
If you want, I can share references to relevant GST rules, notifications, or earlier service tax circulars on this topic.
---
**Want me to explain how Indian businesses pay tax on Facebook ads or how reverse charge works?**
---
### 1. **Tax on Facebook / WhatsApp – Basics**
* **Facebook and WhatsApp themselves do not charge users for using the basic app/service.** So, no direct tax is charged on users for just using these apps.
* However, **Facebook earns revenue mainly through advertising services** — selling ad space to Indian businesses or advertisers.
* These **advertising services provided to Indian advertisers are taxable under Indian GST law** (service tax earlier, now GST).
---
### 2. **Service Tax / GST on Facebook’s Advertising Services**
* When Facebook sells ad services to Indian businesses (advertisers), these are treated as **"Online Information and Database Access or Retrieval Services (OIDAR)"** under GST.
* Facebook is a **foreign service provider**, so the **Indian advertiser is liable to pay tax under the reverse charge mechanism** (i.e., the advertiser pays GST to the government, not Facebook directly).
* Under **service tax regime**, similar rules applied — Indian advertisers had to pay service tax under reverse charge on advertising services provided by foreign digital platforms.
---
### 3. **Why WhatsApp is not directly taxed**
* WhatsApp **does not currently charge fees for its app or any paid service**, so no tax is charged on usage.
* If WhatsApp introduces paid features (e.g., WhatsApp Business services with fees), those may become taxable under GST.
---
### 4. **Legal Provisions**
* **Under Service Tax (pre-GST):**
* Section 66A (Service Tax on services provided by foreign service providers)
* Rule 7(1) of Service Tax Rules (Reverse charge on services provided by foreign entities)
* **Under GST (current law):**
* Entry related to **OIDAR services**
* Reverse charge mechanism under Section 9(3) of CGST Act
* Place of supply rules under IGST Act
---
### Summary:
| Service | Taxable? | Who pays? |
| -------------------------------------------------- | --------------------- | ---------------------------------- |
| Using WhatsApp / Facebook app (free) | No | N/A |
| Facebook Advertising Services to Indian businesses | Yes (GST/Service Tax) | Indian Advertiser (Reverse Charge) |
---
If you want, I can share references to relevant GST rules, notifications, or earlier service tax circulars on this topic.
---
**Want me to explain how Indian businesses pay tax on Facebook ads or how reverse charge works?**
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