When payment is made to Google India or Facebook India for online advertisements and tax is deducted from such payment, the deductor is required to claim the refund of TDS from Google India or Facebook India since in these cases, at the first instance, the deductors have to deposit the tax into the government’s account out of his own pocket and then needs to claim credit or reimbursement from them. Deductors/payers are required to pay the full amount of the bills to Google India or Facebook India.
Introduction
If a person wishes to publish its advertisement through digital platforms, Google and Facebook are the first which comes to anyone’s mind. As we all know, Google and Facebook are global companies.
In India, if anyone publishes its advertisement through these digital platforms, then the invoices are generated by Google India and Facebook India. As per present Indian Tax Laws, tax is deductible on such payments under section 194C of the Income Tax Act, 1961 (“Act”).
Applicability of TDS on payments made to Google India or Facebook India towards Advertisement Expenses
It is under a contract of advertisement between the payer/deductor and Google India or Facebook India, the advertisements are published on digital media and payments are made.
Advertisements are published by Google or Facebook on various digital modes. Section 194C covers a contract of an advertisement within its ambit. Since there exists a contract with the advertiser and Google/Facebook, the provisions of Section 194C of the Income-tax Act would be applicable.
Further, on a bare reading of provisions of Section 194C of the Act, we find that any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract shall deduct tax at source thereon. Explanation to Section 194C of the Act defines the term ‘work’ to include ‘advertising’.
How tax is deducted from payments to Google or Facebook
When a person wishes to publish his advertisements on digital media, he has to create an account with Google Adwords. He has to select various options of advertising and also needs to set the payment mode. The mode of payment is auto-debit type payments through debit cards or credit cards.
On every billing period, Google will issue an invoice and deduct the total billed amount from the preset mode of payment by credit card or debit card. After the payment is deducted, the invoice is released to the customer.
Hence, there is no opportunity to deduct the TDS from the payment being made by a resident advertiser to Google India which is also a resident advertiser. The amount so debited by Google or FB is not net of TDS but the gross amount of the bill hence there is no scope of TDS left from such auto payment.
However, since it is mandatory to deduct TDS from payment to a contractor towards an advertisement contract under section 194C of the Income-tax Act, the payment to google cannot be an exception since the amount is auto-debited.
In such a scenario, there is no option left for the advertisers but to pay the TDS amount out of his own pocket to the government account. Therefore, advertisers are not only paying for the gross amount of the bill but also paying the tax of Google India or FB India out of their own pockets.
Interestingly, Google and Facebook also encourage this system. It is a smart way to force advertisers to pay their tax by advertisers. Remember, TDS is not a separate levy but a payment of income tax on behalf of the deductee. Here, TDS is paid by the advertisers but not deducted by the advertisers, and then a refund is claimed by the deductors from the deductee.
It is explained by the following illustration.
In a billing cycle, there was a bill of Rs. 1,00,000/- raised for advertisements run by google. The auto payment system has debited the billed amount of Rs. 1,00,000/- on the billing cycle end date from the bank account of the advertiser. Since the payment attracts TDS u/s 194C @ 2%, there will be a liability to deposit the TDS of Rs. 2,000/- by the 7th day of the next month to the credit of the Central Government. This sum of Rs. 2,000 as TDS will be required to be paid by the advertiser out of his own pocket. Thus the advertiser is paying Rs. 1,02,000/- in aggregate for the billed amount of Rs. 1,00,000/-.
What is the PAN of Google India
The PAN of Google India Private Limited is AACCG0527D. Its registered office address is given below-
Google India Pvt. Ltd.
No.3, RMZ Infinity, Tower E,
Old Madras Road, 4th & 5th Floor,
Bangalore - 560 016
How to get reimbursement of TDS from Google India or How to claim Google TDS refund for Google Ads
However, there is a good facet that the amount of TDS so paid by the advertiser is actually reimbursed by Google or Facebook to the advertiser.
The policy of Google in respect of getting the reimbursement of TDS so paid by the advertiser is that the advertiser has to claim the reimbursement of the TDS amount so paid by him. Once a valid claim is made by the advertiser the TDS amount will be refunded to the advertiser but not in the form of cash or bank transfer but in the form of credit which will be used to pay the next billed amount.
For getting the reimbursement, the advertiser needs to send the TDS certificates either digitally signed or scanned pdf copy of manually signed TDS Certificates to Google India either by email or by post at the postal address given above. Alternatively, one may upload such TDS Certificates on this page.
Google India Policy on getting TDS Reimbursement and sending TDS Certificates
The following policy is published on the google portal for getting the reimbursement of TDS paid by the advertiser. The policy is reproduced below and can be accessed here.
About TDS certificates
Applies to editions of Google Workspace and other paid subscriptions in your Google Admin console.
Tax Deducted at the Source (TDS) certificates are required every quarter. (More information can be found on the Income Tax Department of India website.)
Certificates for quarters ending in June, September, December, and March need to be issued by July 30, October 30, January 30, and May 15, respectively.
No TDS certificates for the previous financial year will be accepted if sent after April 30 of the current financial year. For example, all certificates for fiscal year 2017–18 must have been sent no later than April 30, 2018.
Sending your TDS certificate
If your Google Account uses monthly invoicing, send a digital copy of the TDS certificate (either electronically signed or a PDF scan of the signed certificate) directly to collections@google.com
If your account uses manual or automatic payments, use either of the following methods to send us the TDS certificate:
Send an electronically signed TDS certificate to us by email. Once the credit amount has been approved, it’ll be added to your account.
Send a signed hard copy of your TDS certificate along with a cover letter that has your 10–digit Customer ID to the following address:
Google India Pvt Ltd.
9th Floor, Building 8, Tower C
DLF Cyber City, DLF Phase 2
Gurgaon, Haryana
122002 India
After you’ve sent the documents, contact us by email with the following details to get the credit:
A digital copy of the TDS certificate (either electronically signed or a PDF scan of signed TDS certificate)
Courier delivery receipt details
Google's Permanent Account Number (PAN) is AACCG0527D and the registered address on the TDS Certificate should be:
Google India Pvt Ltd.
No.3, RMZ Infinity, Tower E,
Old Madras Road, 4th & 5th Floor,
Bangalore – 560 016
India
How much TDS
The current rate of TDS for advertising-related payments to Google India Private Limited is 2% excluding Service Tax and education cesses (per Circular No. 1/2014 issued by the Central Board of Direct Taxes, Ministry of Finance, Govt of India)). However, the rate of TDS is subject to change according to government regulations. Note that Google Ads can't advise you on tax matters. If you have more questions regarding TDS or other tax matters, please check with a tax consultant.
How to get reimbursement of TDS from Facebook India or How to claim Facebook TDS refund for FB Ads
The system of payment of the billed amount, payment of TDS out of own pocket and then claiming reimbursement of TDS so paid on behalf of Facebook India is same as that of Google India.
The procedure of claiming the TDS reimbursement from Facebook India is almost similar to the procedure described above for Google India. In case of Facebook also, the advertiser has to submit/upload the digitally signed or scanned copy of manually signed TDS certificates in pdf format on their portal.
Once the TDS certificates are validated by Facebook, the refund is processed. The advertiser will get an email once the refund has been processed.
Like Google India, in this case too, the refund will not be paid back to the bank account of the advertiser. As per the policy given on the portal of Facebook, the refund will be in the form of a Facebook ad credit and automatically applied to the advertiser’s ad account.
It is also stated that it may take up to two months for Facebook to validate and process the refund.
Further, all certificates must be uploaded by the 31st day of October for the previous fiscal year. For example, certificates for FY 2018-19 must be uploaded by 31st October 2019. Any certificate received after this date will not be granted by Facebook.
Facebook India Policy on getting TDS Reimbursement and sending TDS Certificates
The following policy is published on the Facebook portal for getting the reimbursement of TDS paid by the advertiser. The policy is reproduced below and can be accessed here.
About Tax Deducted at Source (TDS) refunds for India
The following information is for advertisers in India who pay for ads with a credit card, debit card, bank account or manual payment method.
As of 2019, Facebook ads in India are now sold by Facebook India, billed and paid for in Indian rupees, and subject to a Goods and Services Tax (GST) and Tax Deducted at Source (TDS). While there are different rates for TDS depending on service, the rate for advertising is 2% (as per a notification issued by the Government of India, for the period of 14 May 2020 until 31 March 2021, the applicable TDS rate for advertising is 1.5%). This affects all ad accounts that have their business country set to India.
GST and TDS are added whenever you're charged for your ads. The amount charged includes TDS, but you're still required to pay TDS to the government as per local law. If you're an advertiser that resides in a Special Economic Zone (SEZ), you may be certified with the government as GST exempt.
To claim your refund from Facebook, click here to submit a copy of your TDS certificate. Your TDS certificate is sent by the government after you pay Facebook
Bear in mind that:
It may take up to two months for Facebook to validate and process the refund. You'll get an email once the refund has been processed.
The refund will be in the form of a Facebook ad credit and automatically applied to your ad account. At this time, we don't provide invoices for these ad credits.
Excess deposits will result in a delay or rejection of the refund.
All certificates must be received by 31 October for the previous fiscal year. For example, certificates for 1 April 2018-31 March 2019 must be received by 31 October 2019. Any certificate received after this date will not be granted.
If you would like to claim back TDS, your GSTIN or PAN must be added to your account. If you have more than one ad account, your GSTIN or PAN must be added to each account.
Note: Facebook isn't able to give tax advice. If you have a question about taxes, we suggest that you contact your tax advisors or local tax authorities.
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