Content creation through videos is one of the most popular means used by creators these days & YouTube is one of the most popular platform where video creators post their video for viewers to view in their channel
YouTube places the ads on the videos. As & when the Youtuber meets the Youtube’s monetization criteria, they start getting paid with the Advertisement income through Adsense.
Now, the question arises that whether the Youtubers earning this Advertisement income require GST registration?
In this article, we will discuss Whether GST registration is required by Youtubers, When Youtubers need the GST registration, Do Youtubers need to pay any GST and What compliance Youtubers required to meet with respect to GST?
To answer this, we need to understand the nature of supply here and whether the supply is taxable?
Let’s see what Youtubers are essentially doing- They are creating the watchable content, which attracts & retains audience, thereby creating a space for Youtube to place ads.
Let’s first understand the nature of supply, who is the provider of supply & who is the recipient?
The creators are providing the service of content creation to Youtube, where they create the content and allows Youtube to place advertisement on their content. So, here the nature of supply is “Service”. Youtube is the Service recipient & Youtubers are the Service providers.
Whether the above supply is taxable?
The content creation service for generating advertisement space is a taxable supply. We need to see the place of supply because Youtube (service recipient) is a foreign entity. In this case, the place of supply is outside of India because the service recipient is outside of India.
And thus it could result in Exports of services if the conditions of Exports are met. And, if it is established that it’s an export of services, it will be a zero-rated supply which means Service providers (i.e., the Youtubers) wouldn’t charge GST.
So, what are the conditions to qualify this as a Export of services?
1. The supplier of services should be located in India.
2. The recipient of services should be located outside India
3. The place of supply of service should be outside India
4. The payment for the service should be received in convertible foreign exchange
If we look at the above conditions, we can simply say that it is an export of service-
The video creation service provided by Youtubers (Supplier of services are located in India) to Youtube (Service recipient is located outside India), the place of Supply is outside India (since the recipient of service is outside India) and Payment is received in convertible foreign exchange (since the payment is received is dollars, which is then converted in INR & remitted to Youtubers in India)
Since now it is established that it’s an Export of services. Does that mean, that GST registration is not required?
GST registration wouldn’t have been required if it wasn’t a taxable supply. In this case, since it’s a zero-rated supply, GST registration is required.
Also read: Tax aspects every freelancer in India should know
However, Service providers have an exemption to not register with GST if their aggregate annual turnover is up to Rs 20 lakhs. So, if somebody is just earning through Youtube Ads revenue, they do not need GST registration until their revenue crosses Rs 20 lakhs.
Since it’s an export of services, no GST is required to be charged.
As mentioned earlier, they need GST registration if their turnover crosses Rs 20 lakhs.
Once, they register with GST.
– They will be required to file the LUT (Letter of undertaking).
– GST return filing will be mandatory.
– Also, GST Input tax credit can be claimed as refund.
Disclaimer: The above post is only for the purpose of academic discussion and should not be construed as any legal opinion in any matter whatsoever.
The author is a CA in practice at Delhi and can be contacted at: E-mail: email@example.com, Mobile: +91-9811741451