Service tax on online advertising: clarification needed

Case 1. As customer is residing in India, place of provision of service is Place of customer i.e. India. Hence service tax is chargable.

Case 2. Same as Case 1.

Case 3. As customer is residing abroad, place of provision of service is palce of providor of service, i.e. India. Hence service is chargable.

Case 4. As customer is residing abroad, place of provision of service is palce of providor of service, i.e. India. and as add is being viewed by Indian users also, service is taxable.

Thank you,

What if in Case 4, Ads are viewed only by Global users but not Indian users while Customer stays abroad.

Will my company being Indian oblige me to pay the service tax?

I am asking this question in view of 'Export of Services consumed abroad' are exempt from Service Tax.

Thank you. Information provided by you is really helpful.

Whether service is provided in taxable territory or not is governed by Place of Provision of Service Rules, 2012. In the case 3 and 4, Place of provision would be location of service receiver as per Rule 3 of POP. Location of service receiver would be outside India i.e. outside taxable territory. So, Service tax would not be levied. Here, It is not relevant where the ads are telecast.

Does this fall under service tax exempt 'Export of Service' ?

If 6 conditions specified in Rule 6A of Service Tax Rules, 1994 is fulfilled then only service may be said Exported.

So in all 4 cases Service Tax has to be paid?

No, service tax to be paid in the case 1 and 2 only.

Originally posted by : Dileep
	Hi All, I understand this question has been answered earlier. However I would like to get clarification over various scenarios. Company is a internet based advertising company registered in India as Private Limited Company. Ad servers are hosted over cloud. Customer Type Where are ads rendered Service Tax to be Collected? Customer resides in India Ads rendered on website viewed by Indian users only   Customer resides in India Ads rendered on website viewed by Indian + Global users   Customer resides abroad Ads rendered on website viewed by Indian users only   Customer resides abroad Ads rendered on website viewed by Indian + Global users

Its irrelevant in above cases of customer or add viewed etc. As per rule 6, essentioal character is that POPS must fall outside taxable territory. Though in all cases POPS is In taxable territory hence ST would be leviable in all cases. Here no export of service .

Regards

Karanjit Singh

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