If a mobile application only uses ads to get earnings, then there is no need to pay GST Taxes for admob earnings. However if in app purchases is used, then ad mob publishers need to pay taxes under GST for such earnings.
GST is applicable for interstate sales of Services. As for ads are concerned, they are digital services and Google has already paid those taxes to the Government. Google is the contracting entity between an ad mob publisher and the advertiser. Whatever earnings that an ad mob publisher is getting, is after deducting all such taxes. You can calculate ad mob taxable earnings using GST Calculator India.
Google Entity in India: Google Asia Pacific Pte. Ltd.
8 Marina View
Asia Square 1 #30-01
GST number is 200817984R.
In app purchases usually used by game apps, music and videos apps, by paid apps etc. Revenue generated by such sales are taxable under GST and it will come under Interstate sales. You are selling something from State A and another person is buying it from State B.
Why No Tax for Ads Earnings
But in case of in app purchases, Google is not paying any kind of taxes under GST. This basically means that the admob publisher is responsible for paying the due GST taxes. Interstate sale of digital service is taxable under GST and ad mob developer have to pay taxes.
Already a detailed post in availble onWhy Individual Developer Should Add GSTIN in Admob
Whom Should Pay Tax Under GST
It is therefore ad mob developer website shows GSTIN add warning when using in app purchase option. GSTIN for individual publisher is optional for showing only ads in apps. But if an individual publisher decides to use in app purchases, then GST registration is mandatory. For Companies, GST registration and paying taxes are mandatory.
If you have not started registration for GST, start from How to Fill Part A application for GSTIN - Register for TRN Number.
Update 8 September 2017
Publishers who have less than 20 lakhs of income do not need to pay or register for GST even if they are doing Interstate sales.
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