What is Effect of Equalisation Levy 6% Tax By Indian Govt. Adsense Users

This is big question has arrived in the mind of google AdSense and AdWords users when Equalisation Levy 6% tax applied by Indian govt. . That why today we will talk on this topic. There are lots of confusion regarding this because Google sends one mail to all Adsense users.

I was getting this mail 4 days ago after reading this mail I am tried to do a research regarding this what exactly happened due to this tax. I was getting following mail from Google.


This is to inform you that as per the Notification No. 37/ 2016: F.No. 370142/12/2016-TPL dated 27 May 2016 read with Finance Act, 2016, Government of India has levied an ‘Equalisation Levy’ on provision of online advertisement services or any other service or facility for the purpose of online advertisement by a Foreign Company provided on or after June 1, 2016 to specified customers in India. The applicable rate of the levy is 6% of value of fees for providing online advertisement or related services.

As you are aware, the terms and conditions applicable to AdWords require customers to bear any tax or Government charges on the services availed of by them.

Accordingly, with respect to invoices raised by Google for online advertisement and service for the purpose of online advertisement provided on or after 1 June 2016, you will need to deposit 6% Equalisation Levy (as applicable).

The Google Payments Team

Equalisation Levy

From this mail, we clear one think that this tax is applied to the online advertising services and other services. Here we will only talk about Advertising Service. As we know that google is number one online advertising service provider. Now the main question has arrived in mind What is effect of this on our Adsense Earning.

To understand effect of this we need to understand working of Google Adsense

Working Of Google Adsense?

In Google Adsense there are two pillars are present first one is advertisers and the second one is publishers. As we are publishers because we will publish an advertisement of Adsense. And advertisers gives advertisement to Google AdWords and advertisers pay for advertisement. In such a way that Adsense and AdWords are work.

Effect of Equalisation Levy 6% Tax By Indian Govt. Adsense Users

From above  discussion, it is clear that advertisers  want to pay for advertisement. Actually, this tax is applied on the advertisers for their advertisement. To understand What is the effect of this tax on advertisers I am giving one example.

If advertisers pay $100 for advertisement before this tsk  is applied. Now advertisers want to pay around $106 after tax is applied. From this example it is clear that advertisers want to pay more and publishers get less amount for the same advertisement.

This is happening due to 6% tax is going to the government of India. So in above example $6 is goes to the government of India. In such a way that this taxation system is work. Now for AdSense user, i think there is no direct effect of this tax. Adsense users get the indirect effect of this tax. If you Adsense shows $5 in you account then you get $5. There is no deduction in from your AdSense account. Advertisers got the direct effect of this tax.

Now I think you question and problems get clear from this post regarding this taxation system. Such a type of tax is applied the first time in the world. So that lots of confusion has arrived in publishers

I hope you like this post on “ What is Effect of Equalisation Levy 6% Tax By Indian Govt. Adsense Users”. If you like it than shear with you friends and family .

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