I am not user of Google Adwords.But I had an account with it.That’s why I received an email from Google stating update in service tax rate of Google India private limited.This update is just for Indian advertisers only.The service tax rate change is triggered by change in Indian tax regulations.
Below is the excerpt of email send from Google today
“Due to a recent change in Indian tax regulations, the service tax rate for advertising services supplied by Google India Private Limited will change. The rate will be reduced from the current rate of 12.36% to 0% (zero percent). Given that Education Cess and Secondary & Higher Education Cess are calculated as a percentage of the service tax, we will also no longer charge these taxes. This change will take effect for all AdWords invoices dated on or after July 1, 2012.
Please note that Google cannot advise you on tax matters and recommend that you contact your tax adviser for any questions regarding this change.
The tax exemption details (negative list) can be found in the Finance Act, 2012 (Clause 143). In particular, the 17 services that comprise the negative list can be found at Section 66D. The sale of advertising space or time slots is included under (G) Section 66D. Notification No 19/2012-Service Tax appoints the 1st day of July, 2012 as the date from which the provisions of clauses (C), (F), (G) and (I) of the Finance Act, 2012 (Act No 23 of 2012) shall come into effect.
This service announcement is sent to all our Indian customers (active as well as inactive) and does not affect your account status or activity.
The Google AdWords team”
Reading the whole email it seems to be good news for Indian advertisers using the services.The services will now be cheap.I will be interested to know whether change in Indian tax regulations have impacted other advertising companies.I am yet to receive any update from other services.
If you have any email from other advertising companies then share it here for benefit of visitors.Also I am not an expert in tax related matters (it is very tough subject and i really appreciate people choosing this work area) and if you think there is something wrong in my reasoning then please correct me and provide your feedback using comment form below.