• Income from Google Mobile Ads and Selling from Stores

I have apps on Apple Appstore. Apple pays in USD - its around 20Lakh Rupees. From the free version of mobile apps I earn around 60Lakh Rupees from Google Admob(Adsense) - Singapore. What is the best way to save money by paying taxes - Section 44 AD with LUT?
What is the GST code?

I have GSTIN registration with individual proprietary firm.
Asked 24 days ago in Income Tax

Hi

 

Under GST, you can apply for LUT and export services without payment of GST. This would be considered as export of services and a zero rated supply provided you receive the amounts in a foreign currency.

Lakshita Bhandari
CA, Mumbai
5657 Answers
807 Consultations

5.0 on 5.0

- For income from selling of apps 44ADA is applicable. For Adsense advertising income 44AD is applicable.

- GST code is 9983

- Under GST it would be an export of services assuming entire sale consideration is received in convertible foreign exchange and service recipient and place of supply is outside India. For sale of Apps in India, GST@18% would be payable by the supplier. Services provided by aggregator platforms would be treated as import of services and GST@18% would be payable by you. You can claim credit of GST paid on imports on payment basis.

 

For detailed discussion you may opt for phone consultation.

 

Vivek Kumar Arora
CA, Delhi
4476 Answers
606 Consultations

5.0 on 5.0

Hello,

 

Under Income Tax, you can use Sec. 44AD Presumptive Taxation Scheme and declare profit accordingly.

Under GST, you can file LUT and supply these export services without payment of GST.

GST Code would be 9983.

 

I hope this answer satisfies your requirements. For a detailed resolution of your query, you can contact us directly at badlaniassociates at Gmail or take a phone consultation.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Madhya Pradesh
2601 Answers
16 Consultations

5.0 on 5.0

First we need to understand there are totally two streams of income.

1. Paid subscription amount you receive from Apple.

2. Google adsense income which you received from Google.

 

As far as google adsense income is concerned it will be covered under 998365 code of GST and with LUT you need not pay any GST on same.

 

However, I am not sure about GST code on subscription received however I believe it will also be GST free as received from outside India.

 

Also, this income should be covered under 44AD instead of 44ADA as it is not a professional service as covered under 44ADA and we do it for many of our clients.

 

If you need any further assistance we can have a call.

 

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4053 Answers
67 Consultations

5.0 on 5.0

 Google Admob(Adsense)

1. Your Google Admob(Adsense) income will be taxable under the head income from business/profession if it is your main source of Income. 

If this income is not regular then it will be treated as income from other sources. 

Given the scale of income of Rs. 60 Lacs, it can be treated as business income. You can deduct the expenses like salaries, travelling expenses etc related to your business while calculating your profit from the business.

2. In my opinion, you are not eligible for 44ADA for Adsense income but can claim 44AD because you are not carrying out the specified as mentioned under 44ADA. 

3. Since your aggregate turnover is more than the threshold limit provided under GST. You should apply for LUT to invoice your clients without charging GST. 

Apple Appstore

Your sale of apps through the Apple Store will be charged on the sale price at the rate of 18% under GST. It will also be taxable under the head of business or profession. You can opt for 44AD  in this case also. You are not eligible for 44ADA because it is not a specified profession. 

Puja Sharma
CA, Jaipur
53 Answers

Not rated

Hello,

 

The income from Google Adsense would not attract GST as it is export of services. You can obtain LUT for that. This would not be covered u/s 44ADA as it is not a specified profession. You can be governed by section 44AD instead. 

 

The income from apple playstore - the same also would not attract GST as it is export of services. This would also not be covered as specified profession and therefore, would be governed by section 44AD. 

 

Do reach out for  detailed consultation.

 

Regards

Prerna Peshori
CA, Pune
86 Answers

5.0 on 5.0

- Assuming you are developing app. Development of App involves application of technical skills therefore considered u/s 44ADA. 

- code 9983 is for professional, technical and business services. At the time of registration in GST you will get more clarity

- Income tax is levied on net profit and GST is levied on the gross receipts. 

Vivek Kumar Arora
CA, Delhi
4476 Answers
606 Consultations

5.0 on 5.0

Hi,

 

I understand your concern. You can reach out for detailed consultation. We would be happy to help you out. 

 

Regards

 

Prerna Peshori
CA, Pune
86 Answers

5.0 on 5.0

Yes sir it is confusing and difficult. However it depends on the Professional how he deals with it

Naman Maloo
CA, Jaipur
4053 Answers
67 Consultations

5.0 on 5.0

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