Whether Google will be charging GST tax on Google adword advertisers and at what rate?
Whether the cost of advertising on Google will go up or come down?
What will be impact on CPC and earnings of adsense on blogs?
Yes Google will charge GST on Google Adword advertisements. In fact there has been a mail to every adword advertiser to update their GSTIN with Google to avail credit on advertisement.
The rate of tax will be 18%
Considering the impact, there is going to be positive implication on bloggers.
Now advertisers can bid higher though tax rate has increased. Even earlier advertisers were paying service tax on Google ads.
But, earlier advertisers were not able to take input credit of service tax paid.
Understand it with an example.
Suppose A person who deals in ready-made garments advertised on Google and had bid of Rs. 50 for one click.
Then his total cost will be Rs. 50 + 15% service tax = 57.5 per click.
Now with GST his cost will be only 50 and not 57.5 because he can take input credit of tax paid on advertisement. Thus he can bid for entire 57.5 on CPC instead of 50 and still there be no change in profit.
Though initially cash outflow will be higher for advertisers, instead of 57.5 he will have to pay 59 to Google for advertising.
What is the HSN code for the Google Adwords on which 18% GST is being charged by google.
We have also received its credit in our GSTR 2A from Google with their GST No.
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