- GST on digital advertisements in India depends on whether the service provider is located within or outside India.
- Domestic transactions with Google India or Facebook India are subject to 18% GST.
- Businesses can claim Input Tax Credit (ITC) on this GST.
- Cross-border transactions with Google Ireland or Facebook Ireland are considered imports of services.
- GST is payable under the Reverse Charge Mechanism (RCM) at 18%.
- Indian businesses must self-declare and pay the GST.
- ITC can be availed on this amount if the advertisement services are used for business purposes.
- Under RCM, the liability to pay tax shifts from the service provider to the service recipient.
- Indian businesses receiving advertisement services from foreign platforms need to compute GST at 18%, deposit the tax while filing GST returns, report the transaction in GSTR-1 and GSTR-3B under RCM, and avail ITC.
- Businesses availing digital advertising services from foreign platforms must be registered under GST to comply with RCM obligations.
- Unregistered individuals or businesses will not be required to pay GST but will not receive ITC benefits.
- Businesses should verify whether the invoice is issued by an Indian or foreign entity, calculate and pay GST under RCM for foreign transactions, file appropriate GST returns, and maintain proper records and invoices for ITC claims.
- Understanding GST implications on digital advertising is crucial for businesses to avoid penalties and optimize tax benefits.
Source: rmpsco.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
