Applicability of GST on Facebook Ads
Under the new GST law, individuals and businesses showing advertisements on Facebook are asked for their GST Number. A large number of these advertisers have a doubt regarding the applicability of GST on Facebook Ads. So here is our guide for digital marketers on the applicability of GST on Facebook Ads.
Registration Requirement Under GST
As per section 22 of Central Goods and Services Tax law, Every supplier shall be liable to be registered under GST in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds twenty lakh rupees.
However this threshold limit of Rs. 20 lakh is not applicable in following cases and registration has to be compulsorily obtained :
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) a person who is required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make a taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.
An analysis of above mentioned highlighted points makes it clear that any transaction on digital media (internet) will attract applicability of GST law and accordingly GST compliance needs to be ensured. Also on the basis of e-commerce, Facebook might also be required to collect tax at source (TCS)
Thus as an advertiser, you are asked to furnish 15 digits GSTIN in your Facebook Ad account. As a freelancer or individual person, this may look too much of an ask. But as per the current standing of law, you will have to comply with these provisions and furnish GSTIN to Facebook.
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