CA Varun Sharma
Founder Director – ABVS Management Consultancy Services Pvt. Ltd
e-mail – email@example.com ; firstname.lastname@example.org
- YouTuber and Google Business Model
- Hypothetical Facts and Areas of Advice
- Matters Related to GST
- GST Implications on Revenue Part on Income from YouTube
- GST Implications on Expenditure Part on Google or Facebook ads
- Matters Related to Income Tax
- TDS Requirement and Compliance
- YouTuber and Google Business Model
YouTube is a subservient unit of Google and completely synonymous with its parent body Google which controls it thoroughly. Accounts on both sites are linked up, search algorithms match each other. If given the option, Google will provide video results to YouTube before any other video hosting site. The two works seamlessly, the world’s most powerful search engine matched with the world’s most popular video hosting site.
YouTube gives YouTuber (any person who uploads it’s content at YouTube Platform) an option to monetize its content which if it opts for, then content gets commercialized in nature, meaning hereby that the content is available for advertisement spots. YouTube system streamlines displaying advertisements of third parties or sponsors in these slots by over lapping ads upon the original content for few seconds. This entire process triggered post after execution of an agreement with Google containing certain terms and conditions to which a YouTuber has to agree.
By having agreed to such agreement Google initiate placing ads over the content so monetized at YouTube platform, emphatically the YouTube in turn confers the right and yields the permission to its parent entity Google to access the monetized content and allows it to place ads overlapping the monetized content for predetermined slots.
YouTuber while agreeing to monetization of content authorizes and vests right to Google(YouTube) to place and overlap the advertisements of third parties or of sponsors on such content which remains live over YouTube Portal. This entire authority transmission as mentioned before executed by opening an Adsense account through an instrument agreeing the Monetization terms and conditions by Google enunciated in very same instrument of covenant.
Once all set by agreement then the revenue sharing model between YouTuber and Google comes into picture. Google charges the spots to the sponsors or advertizes and a certain percentage of revenue so generated by Google thereafter shared with the content owner or say YouTuber. This is how Google and YouTuber both earns the money.
- Hypothetical Facts and Areas of Advice
A YouTuber who uploads it’s content on YouTube and receives payments from Google though Adsense account and in addition to this it also avails online advertisement services offered by Google and Facebook for advertising itself on social media to promote and increase the viewership of content, in lieu of an amount as consideration for such services.
Where Google/Facebook deducts the amount of consideration from the credit card of the YouTuber and no invoice is made available for the same by Google/Facebook.
Scope of Advice:-
- Is GST liable to be paid on revenue earned from Google (YouTube)? Or is Reverse Charge Mechanism (RCM) applicable to such case, whereby Google (YouTube) under an obligation to discharge GST liability on behalf of YouTuber?
- Is GST liable to be paid on Reverse Charge Mechanism (RCM) on advertisement services offered by Google/Facebook and undertaken by YouTuber for promoting the viewership of its content?
- Is TDS required to be deducted on payments to be made to Google/Facebook for advertizing services?
- Is form 15CA/15CB required to be filed in case of payment of consideration for advertisement services to Google/Facebook ads?
- Matters Related to GST
GST Implications on Revenue Part on Income earned through YouTube
YouTuber uploads the content on YouTube server, and such a server is not located in taxable territory. Taxable Territory here means the territory to which the provisions of this Central Goods and Service Tax Act 2017 applies, which extends to the whole of India except the State of Jammu and Kashmir as stated under sub section 2 of Section 1 at the moment. The Content so uploaded remains available on internet which can be accessed by anyone from anywhere at any time through internet. YouTube in reciprocation shares the income with YouTuber which it generates from overlapped advertisements of third parties upon YouTuber’s content.
Whether Uploading and Monetization of Content on online Database of YouTube server is Supply of Service?
Before concluding anything in the context lets understand the position of law pertaining to following terms:-
- Meaning of Supply
- Meaning of Online Information and Database Access or Retrieval Services
- Meaning of Service
- Meaning of Supply
The word “Supply” has been defined under Chapter III, section 7 of CGST Act 2017 to be read as under :-
Section – 7
1. For the purposes of this Act, the expression “supply” includes–
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or furtherance of business; and
(c) the activities specified in Schedule I, made or agreed to be made without a consideration and
(d) the activities to be treated as supply of goods or supply of services as
referred to in Schedule II.
2. Notwithstanding anything contained in sub-section (1),–
(a). activities or transactions specified in Schedule III; or
(b). such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council,
shall be treated neither as a supply of goods nor a supply of services.
3. Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as—
(a) a supply
of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
On a critical analysis of definition of Supply it becomes so conspicuous that the law makers wanted to cover wide range of transactions into the term Supply and thus they came up with a definition which is Inclusive definition in nature and therefore carries a wide scope. Would like to heed at clause (a) of sub-section (1) of section 7 which cites as under –
“all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business”
Under the definition following combination of words has played a decisive vital role, to identify those basis de rigueur prerequisites in an act to decide whether such an act is supply or not:-
- All Forms of Supply
- Made or Agreed to be Made
- For a Consideration
- In Course or Furtherance of Business
While framing an interpretation of the definition it can be concluded that any act or action which is sort of a supply, delivery, contribution, tendering, furnishing or any other act by whatever name called or known as similar in nature, if has been under taken or has been promised to be undertaken for a consideration or in lieu of something in return or having an identity of quid pro quo, either in course of a business or in furtherance or perpetual run of a business then such an act or action has significant potential to be termed as Supply.
If any of the element among these four elements is missing then such an act cannot be tantamount to Supply. For constituting ‘Supply’ occurrence of all these four elements is an exigency and thus an act cannot be construed as supply unless all these four elements not been conjured together.
So when a content owner uploads its content on online YouTube Portal then it means handing over and delivery of the content to YouTube. And when the same content is been monetized after opening an Adsense account with Google followed by agreeing to the terms & conditions of the agreement in place then it implies commercial intention on the part of Content Owner, which is a order of furtherance of Business.
As earning form YouTube starts after reaching a certain amount of viewership so at the moment content surpasses the stipulated viewership, revenue starts generating in hands of YouTuber. As soon as revenue in hands of YouTuber starts accruing then all four components as discussed above eventually coalesces and brings Supply in legal terms into existence, as all these four factors like Making Supply under the cover of Agreement, in Furtherance of Business and for a Consideration gets over at the very moment when revenue in hands of Youtuber had accrued.
Therefore at the point where YouTuber starts generating revenue from YouTube post after monetization process of content at the same very point ‘Supply’ of content said to be accomplished.
- Meaning of Online Information and Database Access or Retrieval Services
YouTube provides online services on internet which is covered within the meaning as specified under section 2(17) of IGST Act 2017.
Section 2(17) of IGST Act: Definition of “Online Information and Database Access or Retrieval Services” (CHAPTER I – PRELIMINARY)
“online information and database access or retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,-
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
(v) online supplies of digital content (movies, television shows, music and the like);
(vi) digital data storage; and
(vii) online gaming.
The definition is lucid and eloquent inclusive definition in nature and it has categorically addressed digital content like movies, television shows, music etc therefore without shadow of doubt as per clause (v) online supplies of digital content like movies, television shows, music etc is a service within the meaning of section 2(17), which YouTube actually do. Hence uploading content to YouTube portal constitutes a service supplied for which a YouTuber or content owner is to be discharged with a consideration by sharing the revenue earned by Google from online advertisement business.
- Meaning of Service
As per Sec 2(102) of CGST Act
“services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.
Service definition signifies that service nature is intangible unlike goods which have physical existence. As content is online media that is on YouTube server so it do not have Tangibility in its nature ipso facto it is not a commodity or a good rather a service.
When all these explanations put together then it postulates and makes it very clear that uploading content and monetizing same on YouTube portal is Supply of Service undertaken in computerized environment by way of online Information and Database Access or Retrieval Services. And when it is Supply of Service then defiantly Indirect Taxability has to creep in.
Whether Such Uploading of Content on YouTube and Monetization of the same is Taxable Supply with in GST Regime?
Taxability depends upon the Place of Provisioning of service which can be understood from below provisions and elucidation thereof:-
The Contracting Agency of YouTube is Singapore Based which is Google Asia Pacific, Singapore.
As per section 13 of IGST Act “ Place of supply shall be the location of service recipient”.
In the instant case neither Singapore is in taxable territory nor is the YouTube server in taxable territory. The contracting agency from YouTube is based in Singapore thus place of supply of service impliedly becomes location of service recipient which is Singapore.
Therefore if place of supply is not in Taxable Territory then question of levying GST does not arise here.
Whether such a service can be treated export?
Section 2(6) of IGST defines export of services as under:-
“Export of services” means the supply of any service when,
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India]; and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.
Hence if a person is providing services as YouTuber, located in India to Google Asia Pacific, Singapore, which is located outside India, receives payment in convertible foreign currency which is USD, and Such YouTuber and Google Asia Pacific are not merely establishments of a distinct person then it is to be classified as Export of Services. So YouTuber who is uploading content at YouTube online platform is exporting content services.
How much GST shall be levied on Export of Service?
As this service has been provided to a person which is neither in taxable territory nor the place of supply of service is situated in taxable territory so no question of levying GST on such service arises.
However section 16 of IGST Act has articulated the subject as under:-
Section 16 – Zero rated supply of Online IGST ACT – THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 16.
(1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies; notwithstanding that such supply may be an exempt supply.
(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–
(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied,
in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made there under.
Section 16 of IGST Act has eliminated the ambiguity over the matter of Levying GST on Export of Such services. Firstly Export of service is to be treated as “zero rated supply” as per section 16(1)(a). Further, Sub section 3 of section 16 has given the procedure to be followed while exporting goods and/or services. It has given two options that one either has to export the services under a cover of Bond/Letter of Undertaking without payment of GST or else pay GST and take refund of the same later on.
Second option of paying IGST first and then claiming refund of the same later on as per section 16(3)(b) is not viable and prudent process because it will block working capital of business unnecessarily and that too without any conclusive assurance to get refund in hands on time.
Whereas, First option as per section 16(3)(a) sounds more pragmatic, wise and judicious which not only shirk off from payment of IGST on output export of service but also gives an option to get refund of that unutilized input GST/Duties on those goods and services which have been utilized as input for provisioning of such exported services.
Therefore Section 16 of IGST Act will prevail, although there is still a scope to negate and avoid section 16 owing to the reason, when service recipient and place of provisioning of service both are not in taxable territory then no question for levying GST arises. But until and unless any explanatory circular or a notification does not come in this matter from CBIT or Government respectively till then being in adherence to Section 16 of IGST Act 2017 is a compulsion and so as it is recommended.
Procedure to be followed for Letter of Undertaking:-
If section 16 of IGST Act 2017 is opted for, then it brings lot of ancillary exercises and compliances intended to be done. Rule 96A of CGST Rules, 2017 is significant and directive in nature, and to be read as under:-
Rule 96A of CGST Rules – Refund of integrated tax paid on export of goods or services under bond or Letter of Undertaking
- Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of —
- fifteen days after the expiry of three months or such further period as may be allowed by commissioner,
(Inserted vide Notification No. 47/2017-Central Tax dt 18.10.2017) from the date of issue of the invoice for export, if the goods are not exported out of India; or
- fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.
(2) The details of the export invoices contained in FORM GSTR-1 furnished on the common portal shall be electronically transmitted to the system designated by Customs and a confirmation that the goods covered by the said invoices have been exported out of India shall be electronically transmitted to the common portal from the said system. [Provided that where the date for furnishing the details of outward supplies in FORM GSTR-1 for a tax period has been extended in exercise of the powers conferred under section 37 of the Act, the supplier shall furnish the information relating to exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has been furnished and the same shall be transmitted electronically by the common portal to the system designated by the Customs: Provided further that the information in Table 6A furnished under the first proviso shall be auto-drafted in FORM GSTR-1 for the said tax period.] (Inserted vide Notification No. 51/2017-Central tax dt 28.10.2017)
(3) Where the goods are not exported within the time specified in sub-rule (1) and the registered person fails to pay the amount mentioned in the said sub-rule, the export as allowed under bond or Letter of Undertaking shall be withdrawn forthwith and the said amount shall be recovered from the registered person in accordance with the provisions of section 79.
(4) The export as allowed under bond or Letter of Undertaking withdrawn in terms of sub-rule (3) shall be restored immediately when the registered person pays the amount due.
In Nutshell following points to considered with conjunction of Rule 96A
- Prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to be submitted to the jurisdictional Commissioner this also required to be submitted online.
- LOU stands valid for one year, after expiry of one year exporter has to apply for its cancellation by furnishing following records to the satisfaction of officer :-
- That the supply of service had taken place within one year from issue of LOU
- Payment has been received in convertible foreign exchange within said one year
- Furnishing FIRC – Foreign Inward Remittance Certificate duly received from Bank or Receiving agency with which the YouTuber held account in which such payment has been received.
- Issue of Invoices based on checking Adsense account accruals and filing proper returns that is GSTR- 1 & GSTR- 3
Question – Is GST liable to be paid on revenue earned from Google (YouTube)?
Suggestion – Based on the above analysis and conclusion derived IGST on revenue earned from Google is not payable if LOU has been executed and procedure as defined has been followed.
Question – Do Reverse Charge Mechanism applies to such case?
Suggestion – Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Reverse Charge means the liability to pay tax lays with recipient of supply of goods or services instead of the supplier of such goods or services with respect of notified categories of supply.
Section 5 (4) of IGST Act 2017 has articulated Reverse Charge Mechanism as follows –
The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Therefore YouTuber is in capacity of supplier which supplies content to YouTube/Google and as RCM applies on recipient of service which YouTuber is not so question of RCM does not arise.
GST Implications on Expenditure Part
Where YouTuber also advertizes with Google and Facebook under a campaign to increase it’s viewership of his YouTube Channel, and both auto deducts for such advert services from his Credit card.
Whether in such a case GST is livable on such charges and if yes then RCM apply?
Position in this regard has been cleared out by official pages of Google and Facebook both which is as under :-
Position by Google
Taxes or Value Added Tax (VAT) might be applicable to your business, depending on its location. Read on to see what applies in your country. If you’d like to see information for another country, click the drop-down menu above.
Taxes in India
If you are located in India, starting July 1 2017, you will be charged a Goods and Services tax (GST) on all the purchases you make.
GST is the new tax law that replaces current indirect taxes such as service tax, Value Added Tax, excise tax, certain state and central cesses taxes in India. This is a dual taxation model where both the Indian states and Indian central government apply tax on services and goods.
GST consists of 3 types of taxes: central tax, state tax and integrated tax. Google’s location that provides the services and your purchase location determine which tax will be applied to your purchase. These are the rates:
- Central GST (CGST) rate: 9%
- State GST (SGST) rate : 9%
- Integrated GST (IGST) rate: 18%
- Advertisers with a bill-to address in Haryana (i.e. Intra-state service) will be charged CGST + SGST rates. All others are charged the IGST rate.
- GST for SEZ advertisers is 0%.
If you are receiving services from Google India Private Limited (GIPL) then your tax ID will determine which tax is applied to your purchase. Goods and Services Tax Identification Number (GSTINs) are mandatory for business accounts, but optional for individual accounts.
Where to submit GSTIN
All other advertisers can enter their information by navigating to Billing & payments, then clicking on Settings from the menu on the left. In your “Payments Profile” you’ll see a section called “India Tax info” where you can enter any relevant ID numbers.
For Agency handled accounts please ensure the address and GST provided corresponds to the company and state paying for the invoices and claiming GST. If the “Bill to” company name & address in your Invoice differs from the Company actually paying the invoices, please update the Bill to address.
For Business/Individual accounts please ensure the address and GSTIN provided are of the location where the services would be received. This means that the GST number should correspond to the state reflecting in the “Bill to” address in your Invoices. If the GSTIN doesn’t match the state of the bill-to address, the GSTIN won’t be displayed on your invoices.
This is self explanatory from Google Official Page that the auto payment from client’s credit card will go to the account of Google India Pvt. Ltd which is a Indian company and as they mentioned at their website and affirmed there at that all such charges are inclusive of GST so it end up all speculations of paying GST on RCM by YouTuber availing advertisement services from Google India Pvt. Ltd.
Therefore Google India Pvt. Ltd. Itself under the duty to discharge the GST related compliances and pay off the GST billed by it to its customers who are availing advertisement services offered by it.
Position by Facebook
About India’s Goods and Services Tax (GST)
The following information is for advertisers in India who pay for ads with a credit card, debit card, bank account or manual payment method. If you’re an advertiser in India using monthly invoicing to pay for your ads, see About India’s Goods and Services Tax (GST) for monthly invoicing instead.
From October 2018, Facebook ads in India will be sold by Facebook India, billed and paid for in Indian rupees and subject to a goods and services tax (GST) of 18% and Tax Deducted at Source (TDS) of 2%. This update affects all ad accounts that have their business country set to India.
To continue advertising on Facebook, go to your account settings and ensure that:
- a payment method has been added to your account;
business name, address and Goods and Services Tax Identification Number (GSTIN)
have been updated.
- Note: Entering a GSTIN isn’t mandatory. However, if you’re registered for GST and would like to take Input Tax Credit (subject to the fulfilment of other criteria under applicable law, where applicable), enter the GSTIN of your main state of operations or where your business is headquartered.
Please note that if you’re an advertiser that resides in a Special Economic Zone (SEZ), you may be certified with the government as GST-exempt. If this applies to you, contact client services to provide us with your valid SEZ certificate.
GST and TDS are added whenever you’re charged for your ads. The amount charged includes TDS, but you’re still required to pay TDS to the government as per local law. Once you’ve provided Facebook with a TDS certificate from the government as evidence of payment, a TDS refund in the form of a Facebook ads coupon will be granted. To read more about TDS, visit the website of the Indian Tax Authority.
As an example, let’s say you were recently charged INR 100 because you reached your INR 100 billing threshold. The subtotal for the charge will be for INR 100 in ads costs, and then an 18% GST will be added on top of that, so you’ll pay INR 118 in total for that charge (INR 100 + INR 18 = INR 118). Please note that you’re responsible for paying the INR 2 TDS for the ads costs directly to the government. Facebook will refund your INR 2 TDS as a coupon once the TDS certificate you submit is validated. Because GST is added on top of charges, you won’t reach your billing threshold faster, but you may be charged more than your billing threshold amount.
This is also self explanatory from Facebook Official page that the auto payments from client’s credit card will go into the account of Facebook India Pvt. Ltd which is an Indian company and as they mentioned at their website and affirmed there at that all such charges are inclusive of GST so it end up all speculations of paying GST on RCM by YouTuber availing advertisement services from Google India Pvt. Ltd.
Therefore Facebook India Pvt. Ltd. Itself under the duty to discharge the GST related compliances and pay off the GST billed by it to its customers who are availing advertisement services offered by it. Also it has clarified the Tax Deduction at Source (TDS) implication at the very same part which has been discussed later in this article.
Matter Related to Income Tax
TDS Requirement and Compliance
As it is clear from previous discussion that Google India Pvt. Ltd and Facebook India Pvt. Ltd both are Indian Companies operating from India and gets under the covenant or a contract with their potential customers to provide advertising services therefore TDS requirement also arises under section 194C of Income Tax Act 1961.
Section 194C states that any person responsible for paying any sum to the resident contractor for carrying out any work (including the supply of labor), in pursuance of a contract between the contractor and the following:
a. The Central Government or any State Government
b. Any local authority
c. Any corporation established by or under a Central, State or Provisional Act
d. Any company
e. Any co-operative society
f. Any authority constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the needs for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both
g. Any society registered under the Society Registration Act, 1980 or under any such corresponding law to the Act in any Part of India
h. Any trust
i. Any university or deemed university
j. Any firm
The expression, “work” in this section would include-
The person responsible for making payment to resident contractor/sub-contractor should deduct TDS,
a. either at the time of crediting such sum to the account to the payee or
b. at the time of payment thereof in cash or
c. by an issue of a cheque or by any other mode, whichever is earlier.
Where any sum is credited to any account, whether called “Suspense account” or by any other name, in the books of account of the person liable to pay such amount, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. Thus, the tax has to be deducted even if the amount payable to resident contractor/subcontractor is transferred to suspense account by the payer in his books.
Payement/Credit to any resident person other than Individual /HUF to be done at the rate of 2% where PAN card is available or 20 % where PAN card is not available.
No tax is required to be deducted in the following cases:
a. Where the sum paid or credited in pursuance of any contract does not exceed Rs. 30,000,
b. where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year does not exceed Rs. 1,00,000 the person responsible for paying such sums will not deduct TDS under this section
c. Individual or HUF not to deduct tax if the payment or amount credited to the contractor is for personal use
i. No individual or HUF shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for the personal purpose of such individual or any member of HUF
ii. No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his PAN, to the person paying or crediting such amount.
The position on the matter of TDS has also been made clear by Google India Pvt. Ltd & Facebook India Pvt Ltd through their respective official web pages.
Where Facebook India Pvt Ltd touched base the TDS matter at the same very place where it explained the GST related matters, contemporary to this Google has taken up this at a different web page at its official web site which is as under:-
Position by Google
About Tax Deducted at the Source (TDS)
TDS certificates are required every quarter. (More information can be found on the Income Tax Department of India website.)
Certificates for quarters ending in June, September, December, and March need to be issued by July 30th, October 30th, January 30th, and May 15th, respectively.
No TDS certificates for the previous financial year will be accepted if sent after April 30th of the current financial year. For example, all certificates for fiscal year 2013-14 should be sent no later than April 30, 2014.
Sending Tax Deducted at the Source (TDS) certificate
If your account uses monthly invoicing, send a digital copy of the TDS certificate (either electronically signed or a PDF scan of the signed certificate) directly to email@example.com
If your account uses manual or automatic payments, use the following to send us the TDS certificate:
- Either send an electronically signed TDS certificate to us by email. Once the credit amount has been approved, it’ll be added to your account; or
- Send a signed hard copy of your TDS certificate, along with a cover letter that has your 10-digit customer ID, to the following address.
Google India Pvt Ltd,
9th Floor, Building 8, Tower C,
DLF Cyber City, DLF Phase 2,
Once you’ve sent the documents, contact us by email with the following details to get the credit:
- A digital copy of the TDS certificate (either electronically signed or a PDF scan of signed TDS certificate)
- Courier delivery receipt details
Google’s Permanent Account Number (PAN) is AACCG0527D and the registered address on the TDS Certificate should be:
Google India Pvt. Ltd.
No.3, RMZ Infinity, Tower E,
Old Madras Road, 4th & 5th Floor,
Bangalore – 560 016
How much TDS
The current rate of TDS for advertising-related payments to Google India Private Limited is 2% excluding Service Tax and education cesses (per Circular No. 1/2014 issued by the Central Board of Direct Taxes, Ministry of Finance, Govt of India).
Conclusion – Google India & Facebook India both has policy to give credit of TDS deducted by adding it up to account or by giving advertising coupons respectively. Advertiser may initiate deducting TDS on billing or may opt for an auto cut payment from credit cards at the rate of 2% as per section 194C as mentioned by both these vendors.
TDS should be deducted after taking off the GST amount from the billing on in other words TDS shall be deducted on Taxable amount which is exclusive of GST.
In addition to it post after TDS deduction Advertiser is required to file Quarterly Returns of TDS on or before prescribed dates as mentioned in section 203A of IT ACT 1961.
Applicability of FORM 15CA/15CB
A person making a remittance (a payment) to a Non Resident or a Foreign Company has to submit Form 15CA. This form is submitted online. In some cases, a certificate from a Chartered Accountant in Form 15CB is required before uploading Form 15CA online. In Form 15CB, a CA certifies details of the payment, TDS rate and TDS deduction as per section 195 of the Income Tax Act, if any DTAA (Double Tax Avoidance Agreement) is applicable, and other details of nature & purpose of the remittance.
In the instant case of YouTuber who uploads his content on YouTube do not make any payment to any body in relation to any act pertaining to uploading process of content. So when no payment made to any Non Resident or a Foreign Company then question of Form 15CA/15CB does not arise, similarly even if an advertiser in India makes any payment to Google or Facebook, then such payment is made to subsidiary companies of Google or Facebook which are registered in India as Google India Private Limited and Facebook India Private Limited and by course of India taxation and corporate law they both are recognized as Indian Company so even in this case payment if made then it will be to domestic company and hence it is needless to say that here too question of Form 15CA/15CB does not arise.