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GST ON YOUTUBE REVENUE

Here are some examples of passive income, such as YouTube revenue, blogging revenue, money from video-sharing apps, etc. It is important to know the tax treatment in India from both the income tax and GST perspectives. This article goes deeper into YouTube's revenue and the efficiency of GST on blogging revenue.

INTRODUCING YOUTUBERS AND BLOGGERS

The YouTube platform is a subsidiary of Google, a US-based company that allows anyone to open channels and post videos. In return, the company makes money by running ads and other promotional materials on the videos hosted on it.

YouTuber is the person who runs the channel on YouTube. YouTuber starts earning money when the channel gets a certain number of subscribers and when the views on the videos go beyond a certain threshold level as per YouTube policy.

Blogger, on the other hand, refers to a person who provides brands with space to place their ads. Facilitator agencies mediate between bloggers and brands to act as advertising channels. Most bloggers use advertising portals like Google AdSense to generate revenue when ads placed on their blogs get clicked. Google AdSense acts as a medium and bloggers are unaware of the advertisers behind the system.

CAN YOUTUBE REVENUE AND BLOGGING REVENUE BE CALLED 'SUPPLY'?

Section 7 of the CGST Act defines 'supply' under GST. Any transaction can fall under the ambit of GST if it is included under the supply definition. Next, the supply of goods or services will be the supply in the consideration of doing business.

Under the CGST Act, service means nothing but goods, money and securities. It also includes activities involving money or its conversion to certain ideas that are charged separately.

YouTubers provide services by posting monetized videos and content on their channel and providing a platform for advertising. Bloggers provide a platform for advertisers to display their ads with revenue. Therefore, YouTubers and bloggers should be considered service providers.

Bloggers' services can be considered as online information and database access or retrieval services. According to Section 2 (17) of the IGST Act, online information and database access or retrieval (OIDAR) services refer to services where information technology is used to distribute information over the Internet or electronic networks, including online advertising services. The nature of the supply is automated, involves minimal human intervention and is impossible to share without information technology.

IS GST REGISTRATION REQUIRED FOR YOUTUBERS AND BLOGGERS?

GST registration is required by Bloggers or YouTubers, where the total PAN-based turnover is more than 20 lakhs for a single financial year. The limit for special category states is Rs 10 lakh. Note that if the service is provided to a recipient registered in a different state than the provider, YouTuber or Blogger, it is an interstate supply and is responsible for registration regardless of the total turnover.

For example, if Mr Amit, Delhi writes a food blog and his annual receipts are Rs. 5 lakhs. On his blog, he has signed up with Pinstorm, a Mumbai-based advertising agency, for a space dedicated to the per-impression salary for advertising kitchen appliances. Due to the interstate supply of services, GST registration is mandatory. GST registration limit is Rs. 20 lakh is applicable even while the service is being exported.

YouTubers and bloggers have a turnover of Rs. 50 lakhs and if they have fulfilled certain conditions, they can also choose the design plan available for the service providers. Further, if they do not wish to opt for the composition scheme, they may opt for the lower compliance burden of the quarterly return filing and monthly payment of tax (QRMP) plan.

BLOGGING AND YOUTUBER'S SERVICES ARE EXPORTED AND TAXABLE CASES UNDER GST

Export of services is considered as supply under GST when the supplier is in India and the recipient and place of supply are outside India. The supplier and the recipient must not be two establishments of different persons and the receipt of payment must be in convertible foreign currency.

In addition, since Blogger's service is a form of OIDAR service, the place of supply must be the recipient's location, either Google Inc or Google Adsense, both outside India.

Bloggers who post content to Google are satisfied with these terms and the services will be eligible for export. Therefore, since the place of receipt and supply is outside the taxable area, no GST is applicable. Further, under Section 16 (1) (a) of the IGST Act, a zero-rated supply includes the export of goods or services or both.

In other words, YouTubers offers Google AdSense, a zero-rate service for running ads on YouTube videos. So, YouTubers and bloggers who provide services to recipients outside India like Google, YouTube, etc. have two options. YouTuber will either have to export the service in Bond or Letter of Undertaking (LUT) form RFD-11 without paying GST or pay GST and then claim back as a refund.

GST RATE ON INCOME EARNED BY YOUTUBERS AND BLOGGERS

The GST rate applicable for services provided by YouTubers and Bloggers is 18% (i.e. CGST 9% and SGST 9% or IGST 18%). This rate is applicable only if YouTuber is responsible for GST registration or is GST registered.

Wherever YouTubers or Bloggers are exporting the service, it is considered a zero-rated supply and no GST is levied.

GST COMPLIANCE FOR YOUTUBERS AND BLOGGERS

A GST invoice must be issued for all services provided and the invoice must specifically state the invoice number, date of invoice, and value of services offered GST rate.

Although there is no specific format for raising GST invoices by YouTubers or bloggers, the law makes it mandatory to mention certain items on all GST invoices. Details of all invoices must be mentioned in the GST return in Form GSTR-1. All receipts should be properly augmented as per GST rules.

YouTubers or bloggers must file GSTR-1 and GSTR-3B just like any other regular taxpayer.

Author

Santosh Patil ICA & MBA

Founder & Director

Alliance Tax Experts

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