Service Tax And Bloggers

Service Tax is a tax which is paid by the provider of service. Any person whose revenue from providing service (whether Consultancy/ Affiliate Sales/ Designing/ SEO or any other service) during the year is more than Rs. 10 Lakh is liable to pay service tax as per the tax rates prescribed by the govt.The govt keeps changing the service tax rate in the budget announced every year.

Sale of Ad Space is now a part of Service and Service Tax . From 1st July 2012 till 30th Sept 2014 the sale of ad space was specifically exempted from the levy of Service Tax as this was included in the negative list of services on which service tax is not applicable.However, Budget 2014 brought in an amendment and now sale of Ad Unit  attracts Service Tax . This Service Tax is applicable on all kinds of digital ads i.e. Direct Ad Sales, Google Adwords Ads, Ad Sales through Agents etc.

Service Tax Exemption is granted in the following cases:-

1.In case the Total Revenue/Turnover of the business is less than Rs. 10 Lakhs. This exemption is known as Small Scale Exemption.

2.All Services which are exported out of India are also exempted from the levy of Service Tax. The Govt. has specified several rules for determination of whether a service provided is considered as Export or not.

Although service tax is payable by the person who is providing the service he can still charge it from his client. This can be explained with the help of the following example.If Mr. A, who is liable to pay service tax, provides some service to Mr. B for Rs. X Lakhs on which Service Tax is levied @ n%. Now in this case, service tax of Rs. n/100*X is payable by Mr. A to the govt. However, Mr. A can charge this service tax amount  from Mr. B and then deposit this with the govt.

In case, a blogger doesn’t charge Service Tax from the client, he/she would be required to pay this service tax amount from their own own pocket. However, if the blogger’s total net revenue during the year is less than Rs. 10 Lakhs, they are exempt from paying service tax.

Just like PAN No. is issued to each individual for filing his Income Tax Return, similarly Service Tax No. is also issued to every person liable to pay Service Tax. Registration for service tax is a simple process and application for service tax can also be made online through the automated website of the Central Excise and Sales Tax Department.

Different due dates have been prescribed by the Govt for the payment of service tax depending on the kind of registration (Individual/ Company).

Service Tax Return which is a statement of the revenue earned from different type of Services is also required to be filed on a half yearly basis every year in the month of October and April.

However, a service provider is only required to apply for service tax registration and file service tax return only when the total net revenue during the year exceeds Rs. 9 Lakhs. So,Service Tax is liable to be paid only when the revenue exceeds Rs. 10 Lakhs p.a. but is required to apply for service tax registration when the revenue exceeds Rs. 9 Lakhs p.a.