Google AdWords Service Tax Of 12.36% Is No Longer Charged For Indian Merchants

Google AdWords recently  sent out an email to all Indian merchants currently signed up for Google’s AdWords advertising program, that the service tax which was charged at 12.36% has now been waived. This is a great news for all Indian Business who use Google’s AdWords for their internet marketing campaigns. As it turns out, 12.36% does make a considerable difference for those businesses that spend a huge some of money on PPC (pay-per-click) advertising on Google AdWords.

This was possible due to a recent change in the Finance Act,2012.


Below is the copy of the email that Google’s AdWords team sent out :


Dear Advertiser,

Due to a recent change in Indian tax regulations, the service tax rate for advertising services supplied by Google India Private Limited will change. The rate will be reduced from the current rate of 12.36% to 0% (zero percent). Given that Education Cess and Secondary & Higher Education Cess are calculated as a percentage of the service tax, we will also no longer charge these taxes. This change will take effect for all AdWords invoices dated on or after July 1, 2012.
Please note that Google cannot advise you on tax matters and recommend that you contact your tax adviser for any questions regarding this change.
The tax exemption details (negative list) can be found in the Finance Act, 2012 (Clause 143). In particular, the 17 services that comprise the negative list can be found at Section 66D. The sale of advertising space or time slots is included under (G) Section 66D. Notification No 19/2012-Service Tax appoints the 1st day of July, 2012 as the date from which the provisions of clauses (C), (F), (G) and (I) of the Finance Act, 2012 (Act No 23 of 2012) shall come into effect.
This service announcement is sent to all our Indian customers (active as well as inactive) and does not affect your account status or activity.
The Google AdWords team
You’ve received this mandatory email service announcement to update you about important changes to your AdWords account.
© 2012 Google India Private Limited, No. 3, RMZ Infinity – Tower E, Old Madras Road, Bangalore, India 560 016


So did this tax reduction in online advertising help your business? let us know through the comments section below!