A blogger is someone who provides space for brands to place their advertisement. Before we get into a detailed interpretation of GST applicability on Bloggers / You Tubers, it is essential to understand their working pattern. There are facilitator agencies, who work as advertising channel between the companies and the blogger. Most of the bloggers use advertising portals like AdSense from where they earn revenue when ads place on their blogs receive clicks. AdSense works as a medium and bloggers do not know the advertisers behind the system.
GST Applicability on Bloggers
According to section 7 of CGST Act 2017, every supplier whether goods or services are treated as supply under GST. Bloggers supply services by providing a platform to the advertisers to display their advertisement. A blogger is considered as a supplier of services.
Nature of Supply
Nature of services provided by blogger is considered as online information and database Access or Retrieval services. According to section 2(17) of IGST Act 2017 – Online Information and Database Access or Retrieval services means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronics services such as advertisement on internet
Place of Supply
Sec 13 of IGST Act 2017 shall apply to determine the place of supply of services where the location of the supplier (Blogger) of services or the location of the recipient (Google AdSense) of service is outside India. As the location of Google Adsense is out side India (Singapore) section 13 of IGST Act 2017 provision will be applicable to ascertain place of supply.
In accordance with the provision of section 13(12) of IGST Act, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services. It means, bloggers covered under sec 13(12) of GST Act and the place of supply of service is the place of Google AdSense / You Tube. (out of India).
Whether it is Export of Service or not:
Section 2(6) of IGST Act 2017 defines Export of Services as the supply of any service when, ––
1. the supplier of service is located in India;
2. the recipient of service is located outside India;
3. the place of supply of service is outside India
4. the payment for such service has been received by the supplier of service in convertible foreign exchange; and
5. the supplier of service and the recipient of service are not merely establishments of a distinct person;
Blogger services will be considered as export of services as
1. Service provider (bloggers) located in India,
2. Recipient (Google) is located outside India
3. Place of supply is outside India as discussed above
4. Payment received in convertible foreign exchange
5. Bloggers and Google are not merely establishments of a distinct person.
According to the provision of Section 16(1)(a) of IGST Act 2017, export of services is zero rated supply. That means, bloggers are providing zero rated services to Google Ad Sense and Google YouTube for running advertisement on their blogs and YouTube videos.
In case, such services provided to facilitator registered in India, it will not be considered as zero rated and GST Rate will be 18%
It is mandatory for bloggers, you tubers or any other freelancer to registered in GST if their total revenue (aggregate turnover) exceeds upper limit of Rs 20 lakhs(10 lakhs in special states) which is the prescribed limit for registration for service providers under GST Act 2017
Bloggers need to file prescribed GST returns such as 3B, GSTR 1 and Annual Return.
Other relevant issues
Though bloggers received payment directly thru Pay Pal, Bank Transfer and amount is inclusive of Tax, they need not to give invoice to Google, still, it is highly recommended that invoice should be raised and keep it along with books of Accounts. This will help them while filing GST returns.
Further, blogger services are considered as export of services and payment get transfer directly in bank, a Foreign Inward Remittance Certificate (FIRC) is required to support the refund claimed. FIRC is a certificate issued by the bank against any inward remittance received against an export.
(Article was Originally written by CA Vaibhav Kansal but later republished with amendments by Taxguru Team & CA Anita Bhadra and may no represent the views of CA Vaibhav Kansal)