LinkedIn is a popular professional networking platform used by millions of professionals and businesses in India to connect, share content, and find job opportunities. As an American company with operations in India, LinkedIn is required to comply with Indian tax laws and regulations. One key question many Indian users have is – does LinkedIn charge GST (Goods and Services Tax) on its subscriptions and other paid services in India? Let’s take a detailed look at this.
What is GST and how is it applied?
GST or Goods and Services Tax is an indirect tax levied on the supply of goods and services in India. It replaced multiple cascading taxes such as VAT, service tax, excise duty etc. and was introduced in 2017 to create a unified market. GST is charged on the value added at each stage of production and distribution.
Under the GST regime, a taxable person (business) has to register for GST if their annual turnover exceeds Rs. 40 lakhs (for goods) or Rs. 20 lakhs (for services). Once registered, they have to collect GST from the recipients and remit it to the government on a timely basis. The rates of GST range from 0% to 28% depending on the type of goods or services.
GST is charged on all transactions involving the supply of goods and services for consideration, except those that are specifically exempted. Some services that are exempt from GST include healthcare, education, rental of residential properties etc. Imports are also subject to GST besides other import duties.
Is LinkedIn liable to charge GST in India?
Yes, LinkedIn is required to charge GST on the subscriptions and other paid services it offers to users and businesses in India.
This is because:
- LinkedIn has an office registered in India and provides services to Indian users. So it qualifies as a taxable presence under GST laws.
- The services offered by LinkedIn to Indian users such as premium subscriptions, recruitment solutions, ads etc. qualify as ‘online information and database access or retrieval services’ which fall under the 18% GST bracket.
- The fee charged by LinkedIn from Indian users for these services constitutes consideration and therefore, eligible to GST.
- As per GST law, overseas suppliers (like LinkedIn) that provide taxable goods or services to Indian recipients have to register for GST irrespective of turnover.
Therefore, LinkedIn is obligated to charge 18% GST on all its paid services and remit the tax to the Indian government. This is similar to how other global digital platforms like Google, Facebook, Netflix charge GST in India.
What services offered by LinkedIn attract 18% GST?
LinkedIn offers a range of paid services to recruiters, businesses and professional users in India that come under the GST net:
For recruitment agencies and corporations
- LinkedIn Recruiter subscriptions – Provides access to full profiles, messaging tools and candidate analytics.
- LinkedIn job slots – Lets you post multiple job ads.
- LinkedIn Company Pages subscriptions – Offers analytics about page followers and job views.
- LinkedIn Sales Navigator subscriptions – Provides sales leads and account insights.
- Sponsored content and sponsored InMail – Paid messaging to targeted members.
- LinkedIn video ads.
For professional users
- LinkedIn Premium subscriptions – Gives access to full member profiles, messaging tools, courses etc.
- LinkedIn Learning subscriptions – Offers access to online courses.
- LinkedIn Sales Navigator subscriptions.
All the above services offered by LinkedIn to Indian users, whether individuals or businesses, attract 18% GST. This is clearly specified on the pricing and invoices.
What is the GST registration process for LinkedIn in India?
To charge GST in India, LinkedIn first needs to obtain a GST registration number from the government. Here are the key steps:
- LinkedIn has to register for GST in every state where it provides taxable goods or services. It can obtain a single all-India registration for this purpose.
- Registration has to be done on the GST portal by submitting details like business name, directors, address, bank accounts, authorized signatories etc.
- Documents such as ID proof, address proof, photos and business licenses need to be submitted.
- On successful verification, LinkedIn will obtain a 15-digit GSTIN registration number for each state.
- This GST number has to be displayed on LinkedIn’s invoices, website, and other documents.
By completing GST registration, LinkedIn can legally collect GST from Indian users and remit it. The registration data also allows the government to cross-verify LinkedIn’s tax returns and ensure compliance.
How does LinkedIn calculate and collect GST in India?
The process followed by LinkedIn for levying GST can be summarized as:
- Identify all goods/services that attract GST – As analyzed before, this includes subscriptions, recruiter services, ads etc.
- Determine place of supply – GST in India is charged if the recipient or consumer is located in India.
- Find applicable GST rate – 18% for most LinkedIn services.
- Calculate GST amount = (Price – discounts) x 18% tax rate.
- Add GST amount to the invoice and collect from customer.
- File regular GST returns summarizing supplies, tax collected and pay tax to the government.
LinkedIn has adapted its invoicing and payment systems to incorporate GST details for Indian transactions. The tax is calculated precisely for each customer based on plan, features opted, discounts and location.
Sample GST calculation
Particulars | Amount |
---|---|
LinkedIn Recruiter Lite – 1 Year Subscription | ₹9960 |
15% Introductory Discount | ₹1494 |
Price after Discount | ₹8466 |
Add: 18% GST | ₹1524 |
Total Payable | ₹9990 |
How does LinkedIn pay and report GST?
After collecting GST from Indian users, LinkedIn has to follow certain steps to fulfill its GST compliance obligations:
- GST has to be paid to the government on a monthly or quarterly basis by filing GSTR-7 returns online.
- GSTR-7 contains details of all supplies, GST collected, eligible input tax credits and net tax liability.
- The tax can be paid from the GST account maintained by LinkedIn on the portal.
- Annual GST returns also need to be filed in the form GSTR-9 to reconcile taxes paid and input credits during the financial year.
- In case of short payment or non-payment, interest and penalties apply.
- The accounts and tax-related documents need to be audited by CAs to certify GST compliance.
By paying and reporting GST on time, LinkedIn avoids penalties and maintains its standing as a compliant taxpayer. The entire process is transparent as LinkedIn’s GST details are visible to tax authorities. Maintaining robust internal processes and controls is vital for accurate GST compliance every month.
Does LinkedIn need to register for TDS under GST?
If LinkedIn makes certain types of payments to vendors and suppliers that exceed a threshold, it needs to deduct TDS (Tax deducted at source) and remit it to the government.
Under GST, TDS at 1% to 5% is applicable if LinkedIn makes the following payments in a financial year to an unregistered vendor:
- Goods or services procurement over ₹2.5 lakhs.
- Commission to an agent over ₹25,000.
- E-commerce transactions over ₹1 lakh.
For registered vendors, TDS applies on goods invoices above ₹2.5 lakhs only. The TDS deducted has to be reported in GSTR-7 and GSTR-8 returns and paid to the tax authorities. The vendor can claim TDS credit in their tax filings.
By complying with TDS provisions, LinkedIn fulfills its tax withholding obligations as a payer under GST. Proper vendor contracts and invoice management is needed to track TDS applicability accurately.
Conclusion
In summary, LinkedIn is obligated to charge, collect and remit GST in India on all goods and services provided to Indian users and businesses. A18% GST rate applies to most of LinkedIn’s offerings like subscriptions, recruiter services and advertising. By obtaining GST registration and fulfilling compliance requirements like timely filing and tax payment, LinkedIn operates legally under the Indian tax framework. Robust processes and technology integration enables LinkedIn to manage GST computation, invoicing, collection and remittance efficiently across its wide customer base in India.