GST i.e. Goods and Services Tax is expected to come into effect in India from 1 July 2017. GST is a uniform, indirect tax throughout India to replace various taxes levied on sale, transfer, purchase, barter, lease, and/or import of goods and services by the central and state governments. While there is still a lot of information to be officially announced, some clarity on a number of laws indicate that GST will also have a considerable impact on bloggers and other affiliate marketers in India.
Till now, blogging was spared by the Indian Taxation System because most of the YouTubers and Bloggers earned their income via Google Adsense and some referrals such as Amazon or Flipkart Affiliates.
So, here’s how the introduction of GST will impact bloggers and the affiliate industry:
Under GST, bloggers and affiliate marketers fall under the online information and database access or retrieval services (OIDARS) i.e. those who provide electronic services like advertising on internet, cloud services, digital data storage, digital content (movies, e-books, music, shows), online gaming, data or information retrievable in electronic form, etc.
According to the information so far received, you need to obtain GST registration compulsorily, if you fulfill a list of conditions. Out of that long list, there are three conditions which concern bloggers and affiliate marketers. They are:
- Your turnover in a financial year exceeds Rs 20lakhs (Rs 10 lakhs for Special category states)
- You make inter-state supply of goods and/or services (which is often the case for a blogger)
- You supply online information and database access or retrieval services from a place outside India to a person in India
Thus, according to the second point, even though you are not earning Rs 20 lakhs or more annually from your blog or affiliate website, you will have to get a GST registration if you are supplying services outside of your state i.e. if your blog is being visited and read by people outside of your state and if your blog is making commission from outside of your state.
According to the third point, bloggers living outside India but supplying services in India are also liable to get GST registration even if their annual turnover does not exceed Rs 20 lakhs.
Apart from affiliate commissions, bloggers and affiliate marketers also earn via advertising. If your blog is only earning via ad services within your state then you will be exempt from GST in case your annual revenue does not exceed Rs 20 lakhs. But if you are providing ad services outside of your state too, then you will not be exempted from GST even though you earn less than Rs 20 lakh every year.
How are YouTubers and Bloggers taxed currently in India?
Bloggers and YouTubers provide quality content for which they earn in exchange. Presently, Youtubers and Bloggers aren’t taxed as much because most of their income is credited from outside India.
But starting now, each and every resident of India is required to be registered under the GST taxation. Previously, the income generated from outside of India was exempted from any tax altogether, but now, GST registration is much compulsory for income generated from abroad.
If any person fails to register himself/herself under the GST scheme, he/she shall be penalized as –
- For Non-Registrants – Upto ₹25,000
- For No Returns Filing – Upto ₹100 Per Day
What is the GST rate for bloggers?
Bloggers fall under the 18% GST rate.
What if a liable individual does not register for GST or commits a fraud?
In case, someone evades GST registration or does not pay tax or makes short payments, they will be charged with a penalty of 10% of the tax amount due or a minimum of Rs 10,000.
In case, someone commits fraud while filing GST, they will be charged with a penalty of 100% of the tax amount evaded/short deducted etc. or a minimum of Rs 10,000. The offender will also be charge with a prison term if the tax amount evaded exceeds Rs 50 lakhs.
How will blogging services delivered outside India be handled under GST?
Under GST no tax will be payable for export of services.
A service will be considered export of services only if:
- The supplier of service (blogger or website owner) is located in India
- The recipient of service is located outside India
- The payment of service is received in convertible foreign exchange
The place of supply of service is outside India
If your blog or website is serving to a recipient which does not fall under any of the below mentioned conditions then your place of supply of services is considered outside India:
- Location of address given by the recipient of service is in India
- Credit/debit card or any other cards used for payment has been issued in India
- Billing address of recipient of service is in India
- IP address of device used by recipient of service is in India
- Bank of recipient in which account is used for payment is in India
- Country code of SIM is in India
- Location of fixed land line through which service is received by recipient is in India
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If you have any queries, doubts or more information relating to GST, do share them with us in the comments section.
Conclusion – Youtubers and Bloggers aren’t exempted from taxes anymore, bloggers and youtubers are now liable to come under the 18% tax bracket. Even if you earn a single penny from online advertising and you are a citizen of India, you are required to get registered under GST accordingly.