Earnings from YouTube, blogging, and video-sharing apps are considered passive income. In India, the tax treatment involves income tax and Goods and Services Tax. Under income tax laws, these earnings are categorised as business or professional income, taxed according to individual income tax slabs. Deductions for related expenses may apply. For GST, individuals must consider registration thresholds and obligations. Assessing whether earnings surpass the GST registration threshold is crucial. Staying informed about tax implications, seeking professional advice, and ensuring compliance with the evolving tax laws is vital for those earning through these digital platforms in India. In this blog, we shall see the application of GST on youtube income of individuals and bloggers.
Exploring YouTubers and Bloggers
YouTube, a subsidiary of Google, is a popular video-sharing platform that provides individuals with the opportunity to create and share videos with a global audience. This platform’s revenue model primarily relies on advertising and promotional material displayed alongside user-generated content.
YouTubers are individuals who manage channels on YouTube, generating various types of content to engage and entertain viewers. These content creators can monetise their efforts once they accumulate a specific number of subscribers and achieve a predetermined level of views, in accordance with YouTube’s monetisation policies.
Bloggers, on the other hand, are online content creators who offer platforms for brands to display their advertisements. These individuals often collaborate with intermediary agencies to establish advertising partnerships. Bloggers commonly utilise advertising portals like Google AdSense to generate income when visitors to their blogs interact with the displayed advertisements. Notably, Google AdSense serves as a facilitator, safeguarding the anonymity of advertisers from bloggers.
Categorising YouTuber and Blogger Income as ‘Supply’ under GST
The Central Goods and Services Tax Act defines ‘supply’ under the GST registration. Specifically, a transaction can be subject to GST only if it falls within the ambit of the definition of ‘supply.’ It’s important to note that the supply of goods or services, when conducted with consideration for the purpose of conducting business, is classified as a supply under GST. The CGST Act further defines ‘service’ as anything other than goods, money, and securities, encompassing activities involving monetary transactions or their conversion for a consideration.
GST on YouTube Income and Bloggers as Service Providers
YouTubers and bloggers both offer services that can be considered under the GST framework. YouTubers provide services by creating and posting videos and content on their channels, monetising their content, and offering a platform for advertisers. Similarly, bloggers provide services by furnishing a platform for advertisers to display their content, also with monetisation opportunities. Consequently, both YouTubers and bloggers are deemed to be service providers.
The services rendered by bloggers can be categorised as online information and database access or retrieval services, as defined under Section 2(17) of the Integrated Goods and Services Tax (IGST) Act. Online Information and Database Access or Retrieval (OIDAR) services pertain to services that employ information technology to deliver information via the internet or an electronic network, encompassing online advertisement services. These services are characterised by their automated nature, minimal human intervention, and reliance on information technology, making them impossible to offer without its use.
So, GST on YouTube income and bloggers are rightly considered suppliers of services under GST regulations. Bloggers’ services, in particular, align with the definition of OIDAR services due to their characteristics and the use of technology in delivering online content and advertising.
Applicability of GST on YouTube Income and Bloggers
Bloggers and YouTubers are required to register for GST when their total PAN-based turnover exceeds Rs. 20 lakhs within a financial year. However, in special category states, this threshold is set at Rs. 10 lakhs.
It’s important to note that if these content creators provide services to recipients who are registered in states different from their own, the transaction is considered an interstate supply. In such cases, GST registration is mandatory, regardless of the total turnover.
Composition Scheme and QRMP Option
GST on YouTuber income is flexible as youtubers have the flexibility to opt into the composition scheme designed for service providers if their turnover remains within Rs. 50 lakhs, provided they meet specific conditions. Alternatively, if they choose not to enter the composition scheme, they can opt for the Quarterly Return filing and Monthly Payment of taxes (QRMP) scheme, which entails reduced compliance burdens. This allows for more convenient GST on youtube income while catering to the individual circumstances of YouTubers and bloggers.
Taxability of Blogging and YouTuber Services as Exports under GST
Under GST regulations, export of services is recognised as a supply when the supplier is based in India, while the recipient and the place of supply are both located outside India. Importantly, the supplier and recipient should not be two establishments of distinct persons, and the consideration must be received in convertible foreign currency.
OIDAR Services and Place of Supply
In the context of bloggers, whose services typically fall under Online Information and Database Access or Retrieval (OIDAR) services, the place of supply must be the recipient’s location, often involving entities like Google Inc and Google AdSense, which are located outside India.
Bloggers as Exporters of Services
Given these conditions, bloggers who post content on platforms like Google meet the criteria for exporting services. In such cases, where the recipient and place of supply are both outside the taxable territory, no GST is applicable. This treatment aligns with Section 16(1)(a) of the Integrated Goods and Services Tax (IGST) Act, which considers zero-rated supplies to encompass the export of goods or services, or both.
Zero-Rated Services by YouTubers
Similarly, YouTubers provide zero-rated services to entities like Google AdSense, which run advertisements on YouTube videos. As a result, YouTubers and bloggers delivering services to recipients located outside India, such as Google and YouTube, have two options:
1. Export Services: YouTubers can export their services under the cover of a bond or Letter of Undertaking (LUT) using Form RFD-11 without the obligation to pay GST.
2. Pay and Claim Refund: Alternatively, they can pay GST upfront and subsequently claim a refund.
In either case, the taxability of these services as exports under the regulations of GST on youtube income ensures that no GST is levied on transactions where the recipient and place of supply are outside the taxable territory, promoting ease of doing business for YouTubers and bloggers engaged in international service provision.
Rates of GST on YouTube Income and Bloggers
For services provided by YouTubers and bloggers in India, the applicable GST on youtube income is at rate of 18%. This rate comprises of 9% Central Goods and Services Tax and 9% State Goods and Services Tax for intra-state transactions. In the case of inter-state transactions, the Integrated Goods and Services Tax of 18% is levied. It is important to note that this GST rate applies when the YouTuber or blogger is liable for GST registration or has already obtained GST registration.
However, when YouTubers or bloggers export their services, such transactions are considered zero-rated supplies. In such cases, no GST on youtube income is charged, which encourages ease of business for content creators engaged in international service provision.
GST Compliances for YouTubers and Bloggers
For GST on YouTube income and bloggers operating as GST-registered service providers, there are specific compliance requirements to adhere to:
1. GST Invoice Issuance: YouTubers and bloggers must issue GST invoices for all the services they provide. While there isn’t a standardised format for invoices of GST on youtube income, certain essential details must be included. These details typically comprise the invoice number, date of the invoice, the value of the services offered, the GST rate, among other pertinent information.
2. Mandatory Details on GST Invoices: Ensure that the GST invoices contain necessary information mandated by the law. While the format may vary, specific key elements should be present on all GST invoices.
3. Filing of GST Returns (GSTR-1 and GSTR-3B): YouTubers and bloggers are required to file GST returns in accordance with the stipulated timelines, just like any other regular taxpayer. There are two primary GST returns they need to file:
a. GSTR-1: This return is for reporting outward supplies. It contains details of all the invoices issued by the service provider, including their taxable value and the applicable GST.
b. GSTR-3B: This return is a summary return where the taxpayer summarises their sales and input tax credit. It helps calculate the net tax liability for a given tax period.
Compliance with these regulations is crucial for GST on youtube income and bloggers to ensure they meet their legal obligations and avoid any potential penalties or liabilities. It is advisable to keep updated of any updates or changes in GST rules and regulations that may impact their specific circumstances.
Final Thoughts
GST on YouTube income is a significant consideration for content creators in India. YouTubers are subject to an 18% GST rate on their services, which includes CGST and SGST for intra-state transactions or IGST for inter-state transactions. Compliance involves issuing GST invoices with specific details and filing GSTR-1 and GSTR-3B returns, similar to other regular taxpayers. However, services exported by YouTubers are considered zero-rated supplies, exempting them from GST on youtube income. As the digital sector continues to evolve, understanding and adhering to GST regulations is essential for YouTubers to manage their finances, legal obligations, and tax liabilities efficiently.
