GST on Advertisement income from social media.
Taxation for Bloggers/ You Tubers:
According to Section 7 of CGST Act, 2017, every supply whether goods or services or both(except few) are treated as supply under GST, That means, bloggers covered under GST regime as because they provide/ supply services. However, weather a blogger is taxable under GST Act 2017 or not shall depend on various factors which are discussed below in detail and step by step.
GST Act 2017 for Bloggers/ You Tubers in India
GST is applicable on Goods as well as Services. Bloggers provide services on internet i.e. they provide online services through their blogs and hence they have to check whether they covered under the provisions of GST Act or not.
What is Nature of Service: According to Section 2(17) of IGST Act, 2017, Online Information and Database Access or Retrieval Services (OIDARS) 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 electronic services such as, ––
1. advertising on the internet;
2. providing cloud services;
3. provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
4. providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
5. online supplies of digital content (movies, television shows, music and the like);
6. digital data storage; and
7. online gaming;
Thus, as a blogger you are covered under the above provision of GST Act 2017 as supplier of Online Information and Database Access or Retrieval Services.
What is Place of Supply:
Section 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 services is outside India. As the location of Google AdSense is outside India, the place of service shall be decided in accordance with Section 13 of IGST Act, 2017.
In accordance with the provision of Section 13(12) of IGST Act 2017, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services. That means, bloggers covered under this provision and the place of supply of service is the place of Google AdSense/YouTube.
Whether it is Export of Service or not:
Now, the provision of Section 2(6) of IGST Act 2017 defines Export of Services which means 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;
Thus, bloggers are exporting services as supplier (You) located in India, recipient (Google) is located in outside India and place of supply is also outside India as discussed above and payment received in dollar ($) i.e. in convertible foreign exchange and you and Google are not merely establishments of a distinct person.
How will Export be treated(Zero Rated Supply):
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 AdSense and Google YouTube for running advertisement on their blogs and YouTube videos.
Whether Registration required:
From combined reading of Section 22 & 23 of CGST Act,2017, bloggers as a person engaged exclusively in the business of supplying services that are not liable to tax or wholly exempt from tax under the CGST Act 2017 or under the IGST Act 2017. In other words, bloggers who only earn online money from Google AdSense/YouTube are suppling services which are wholly exempted from GST tax.
Now, if you read the provision of Section 2(47) of CGST Act 2017, you shall understand the fact that Exempt Supply means supply of any services which attracts nil rate of tax i.e. 0% (Zero Rates) and therefore a blogger specifically covered under the provision of section 23 of CGST Act 2017 and not liable for registration.
That means, if you have blog or website and only source of income is from Google AdSense, then there is no need to either apply for GST registration or pay GST tax. In other words, if you are blogging from India and receive payment from Google AdSense, you are not required to register yourself under GST Act 2017.
What happened to Google:
Google AdWords covered under 2(45) of CGST Act 2017 as electronic commerce operator and it must be get registered in compliance with the provision of Section 24 of CGST Act 2017. Therefore, AdWords is required to collect tax at source (from Advertisers) and shall be paid to the Government by AdWords (e-commerce operator).
If you have AdWords account, you may notice the invoice where GST tax shall be charged from you (Advertiser) for showing ads on bloggers site. Thus, Google AdWords is already collecting GST and deposit it to the Govt and therefore, you as a blogger not required to pay any GST.
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