income received for publishing advt in our website

[felix ka]

Hai experts,

what do you think on the service tax liability under 'sale of advertising space/time' of the 'Adsense' income received from Google, USA for publishing the advertisements of their customers in our company's web-site ?Since Google is paying ST on income received from their customers (who seek the services of Google in publishing their advertisements), can we argue that the income we receive is a part of 'ST paid' amount? But advertisements on our website are not only of Indian companies and we receive income in Indian Rs (not in foreign currency) and Google no where says that what we receive is ST paid income. What is your opinion?

[YAGAY andSUN]

In my opinion, you're liable to charge service tax on the 'sale of space or time slot for Advertisement from your customers.  As per the Explanation 1 of  65 (105) (zzzm) of the Act , sale of space or time for advertisement includes:-  Providing space or time as the case may be for display advertising, showcasing of any product or service in video programmes, television programmes or motion pictures or music albums or on billboards, public places, buildings conveyance, cell phones, automated teller machines, internet.

 

 

[felix ka]

There i agree with you Mr. Pradeep Khatri. My doubt is whether we can argue that the amount we receive is a part of 'ST paid income' and hence we are not liable to pay ST (again)  because Google is paying ST on income received from their customers (who seek the services of Google in publishing their advertisements).  
  

[YAGAY andSUN]

Since you have not been receiving remittance in foreign currency, therefore, you are liable to service tax in India.

[NEERAJ KUMAR, RANCHI]

Dear Mr Felix,

To be very precise to your query, you cannot argue like this. You are required to pay service tax for such services. If you have paid service tax to google or any body, you can take cenvat credit of that amount.

with regards

Neeraj

AI Summary

Sale of advertising space: Adsense income attracts service tax liability; cenvat credit may be claimed for tax paid. Income from hosting third party advertisements on a website is taxable as sale of space or time for advertisement, including internet display advertising; receipts not remitted in foreign currency render the domestic recipient liable to service tax, and any tax paid to an upstream provider may be available as cenvat credit rather than extinguishing the recipient's own tax obligation.