Services tax on whatapp/Facebook

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Shefil Vhora

Shefil Vhora (Querist)

17 April 2016 Can Indian Government collect tax from whataap or Facebook? under which section it leveed? if No why No?

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CA Mehta Ankur N.

CA Mehta Ankur N. (Expert)

17 April 2016 No, because facebook & Whats app dont charge for their application .

Shefil Vhora

Shefil Vhora (Querist)

17 April 2016 But sir Facebook makes money a number of ways however advertising is the company's revenue channel. With self-serve ads becoming a booming business for Facebook and with the growth of Engagement Ads, Facebook could be on track to generate up to $1 billion in revenue this year. so any income genrat

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

25 July 2025 Great point! Here’s how service tax (and now GST) applies to platforms like **Facebook and WhatsApp** in India:

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### 1. **Tax on Facebook / WhatsApp – Basics**

* **Facebook and WhatsApp themselves do not charge users for using the basic app/service.** So, no direct tax is charged on users for just using these apps.

* However, **Facebook earns revenue mainly through advertising services** — selling ad space to Indian businesses or advertisers.

* These **advertising services provided to Indian advertisers are taxable under Indian GST law** (service tax earlier, now GST).

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### 2. **Service Tax / GST on Facebook’s Advertising Services**

* When Facebook sells ad services to Indian businesses (advertisers), these are treated as **"Online Information and Database Access or Retrieval Services (OIDAR)"** under GST.

* Facebook is a **foreign service provider**, so the **Indian advertiser is liable to pay tax under the reverse charge mechanism** (i.e., the advertiser pays GST to the government, not Facebook directly).

* Under **service tax regime**, similar rules applied — Indian advertisers had to pay service tax under reverse charge on advertising services provided by foreign digital platforms.

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### 3. **Why WhatsApp is not directly taxed**

* WhatsApp **does not currently charge fees for its app or any paid service**, so no tax is charged on usage.

* If WhatsApp introduces paid features (e.g., WhatsApp Business services with fees), those may become taxable under GST.

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### 4. **Legal Provisions**

* **Under Service Tax (pre-GST):**

* Section 66A (Service Tax on services provided by foreign service providers)
* Rule 7(1) of Service Tax Rules (Reverse charge on services provided by foreign entities)
* **Under GST (current law):**

* Entry related to **OIDAR services**
* Reverse charge mechanism under Section 9(3) of CGST Act
* Place of supply rules under IGST Act

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### Summary:

| Service | Taxable? | Who pays? |
| -------------------------------------------------- | --------------------- | ---------------------------------- |
| Using WhatsApp / Facebook app (free) | No | N/A |
| Facebook Advertising Services to Indian businesses | Yes (GST/Service Tax) | Indian Advertiser (Reverse Charge) |

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If you want, I can share references to relevant GST rules, notifications, or earlier service tax circulars on this topic.

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**Want me to explain how Indian businesses pay tax on Facebook ads or how reverse charge works?**

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