20 October 2013
My client launches games that are compatible with android based mobile devices.Presently, Game is free of cost for users. When users play game, some ads are displayed on screen for example ad of wechat. If the user click on that ad , my client receives income from google not from the person being advertised Questions:
1. is this ad payment received from Google chargeable to service tax (as per me ads on internet are covered in negative list of service tax) 2.we are not aware where game is being played , who is the person being advertised, It is controlled by google who is our direct customer.It is also possible that if an indian entity is being advertised , it may be paying service tax under reverse charge on payment made to google
3. what will be implications when our game will become chargeable
20 October 2013
Finance Minister , in his budget 2012 speech, announced that selling of space or time slots for advertisements other than advertisements broadcast by radio or television will be included in the negative list and thus will be exempt from the levy of service tax at the rate of 12 per cent. The negative list currently comprises of 17 services and the mega exemption list covers an additional 34 services. As a consequence the sale of space for advertisement in by mobile operators, VAS providers, websites, blogs etc. on the Internet will be exempt and would not attract any service tax
20 October 2013
However, Services provided by advertising agencies and relating to making or preparation of advertisements would not be covered in this negative list and are still taxable at the enhanced rate of 12%
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