Friday, June 16, 2017

Adsense Income Under GST India

So many people have confusion whether Adsense income is coming under GST radar or not. Whether GST registration is compulsory for people earning income via adsense or not. If you are also confused then here is the post just for you...

Before going to GST we have to first understand OIDAR.

Online information and database access or retrieval (OIDAR) services have been defined in Service Tax Rules to mean 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
  • advertising on the internet
  • providing cloud services;
  • provision of e-books, movie, music, software and other intangibles via internet;
  • providing data or information, retrievable or otherwise, to any person, in electronic form
  • online supplies of digital content (movies, television shows, music, etc.); 
  • digital data storage; and 
  • online gaming.

Do OIDAR services include all services mediated by information technology over internet or electronic network?
Using the internet, or some electronic means of communication, just to communicate or facilitate outcome of service does not always mean that a business is providing OIDAR services.

Here are some services which does not come under OIDAR:
  1. Supplies of goods, where the order and processing is done electronically
  2. Supplies of physical books, newsletters, newspapers or journals
  3. Services of lawyers and financial consultants who advise clients through email
  4. Booking services or tickets to entertainment events, hotel accommodation or car hire
  5. Educational or professional courses, where the content is delivered by a teacher over the internet or an electronic network (in other words, using a remote link)
  6. Offline physical repair services of computer equipment
  7. Advertising services in newspapers, on posters and on television

Indicative List of OIDAR services

   1.Website supply, web-hosting, maintenance of programmes and equipment, remote systems     administration;    
 online data warehousing where specific data is stored and retrieved electronically;
 online supply of on-demand disc space.

  1. Supply of software and updating thereof;
(a) Accessing or downloading software (including procurement/accountancy programmes and anti-virus software) plus updates;
(b) software to block banner adverts showing, otherwise known as Bannerblockers;
(c) download drivers, such as software that interfaces computers with peripheral equipment (such as printers);
(d) online automated installation of filters on websites;
(e) online automated installation of firewalls.

  1. supply of images, text and information and making available of databases;

(a) Accessing or downloading desktop themes;
(b) accessing or downloading photographic or pictorial images or screensavers;
(c) the digitised content of books and other electronic publications;
(d) subscription to online newspapers and journals;
(e) weblogs and website statistics;
(f) online news, traffic information and weather reports;
(g) online information generated automatically by software from specific data input by the customer, such as legal and financial data, (in particular such data as continually updated stock market data, in real time);
(h) the provision of advertising space including banner ads on a website/web page; (Adsense comes here)
(i) use of search engines and Internet directories.

  1. supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events;
(a) Accessing or downloading of music on to computers and mobile phones;
(b) accessing or downloading of jingles, excerpts, ringtones, or other sounds;
(c) accessing or downloading of films;
(d) downloading of games on to computers and mobile phones;
(e) accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are geographically remote from one another.
(5) supply of distance teaching.
(a) Automated distance teaching dependent on the Internet or similar electronic network to function and the supply of which requires limited or no human intervention, including virtual classrooms, except where the Internet or similar electronic network is used as a tool simply for communication between the teacher and student;
(b) workbooks completed by pupils online and marked automatically, without human intervention.

Fully automated services come under OIDAR. Suppose a pdf document is emailed manually by provider then this does not come under OIDAR.

The same pdf file automatically emailed by the providers sytem comes under OIDAR. That means any ebook is for automatic download then OIDAR is applicable. This generally happens where sales of ebooks are high.

Do Google Adsense come under OIDAR?
From the above definition it comes. But there is also a valid reason why GST may not applicable for Adsense income because this service also satisfies export of service terms and conditions.

A service is termed as export if receipent of service location is outside India.

Hence export services are tax exempt in GST.

But still some people may argue that the service is being consumed by Indian consumers and the service recipent is India. Hence tax is applicable.

So as long as income is below 20 lakhs, you need not worry. But still official statement from tax authorities is very much helpful in deciding tax applicable or not.

Hope this post clarifies your confusion. Have any query then do comment below.


  1. Adsense payments are made in $. Further the paying entity is located outside India.
    Google Asia Pacific Pte. Ltd.
    70 Pasir Panjang Road, #03-71,
    Mapletree Business City,
    Singapore 117371
    (check your payment details in adsense a/c.)
    Hence it may come under export services. Yes, official statement from GST authorities on adsense payment will be very much helpful.

  2. Thanks for the information
    Very helpful.
    But still confused on
    GST registration mandatory for Adsense users.