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From work to leisure, everything is digitalized, with people even generating income out of online services. A lot of millennials have opted for online vlogging as a career on social media platforms. One of the most popular platforms is Youtube. There are taxation policies for such sources of income like GST on Youtube income.
To understand GST on Youtube income, there are certain tax terminologies that one must be aware of
Service Provider - The Youtuber - the person holding the channel
Service Receiver - Youtube, the subsidiary of Google
Nature of Service - Supply or Domestic supply/export
According to the GST Act, any service transaction is liable to GST only if it comes under the supply definition.
CGST Act Section 7 states that any transaction of services/goods made for consideration should be covered under the supply heading. It is further explained in the CGST Act Section 2 (102) in the definition of Services.
One needs to understand and analyze the terms of Place of supply mentioned under the IGST Act to clearly understand if this is a domestic service or export service.
Further explained in the IGST Act, the service provided should be online and should have the involvement of a database. The place of the supply is the location of the service receiver.
For example, if the Service Receiver is Google i.e located out of the country, the services are considered as zero-rated supply only if these other conditions are fulfilled -
The location of the supplier should be India.
The location of the receiver should be outside India
The supply place should be outside India.
The payment should be made in convertible foreign exchange.
The provider and receiver are not establishments of a distinct individual.
With all of the above-mentioned conditions fulfilled, for any service which is considered a zero-rated supply, no GST will be charged on those services.
Now a big question that arises here, whether all YouTubers/bloggers are registered under the GST Act or not? Do they pay GST on Youtube income? Are they sending invoices to Google? Can they claim a refund?
According to the GST Act, the service providers whose turnover is more than Rs. 20 Lakhs yearly have to compulsorily get registered under the GST Act and pay GST on Youtube income. They also have to issue invoices and later file their IT returns.
The GST rate charged on income earned by Youtubers/bloggers is 18% i.e. - 9% CGST + 9% SGST. The GST on Youtube income is calculated under this rate.
In case the services are rendered to foreign countries, they are considered as zero-rated supplies. No GST is charged on them.
A GST bill is required to be issued against all the services provided with all important details like invoice number, the value of the services, GST rate, etc., clearly mentioned on it.
There is no specific format of a GST invoice for YouTubers/bloggers, but there is a list of details that are compulsory to be mentioned on the invoice. The information regarding all invoices is needed to be mentioned in the GST return, i.e. in the Form GSTR-1. All GST rules must be followed while issuing the invoices. Just like any other taxpayer, YouTubers/bloggers also have to file GSTR-1 and GSTR-3B.
Yes, if you are an Indian Youtuber or content creator who gets responses and views from the people of the US, the earnings from those views will be subtracted in the form of taxes. YouTube has started deducting these taxes from June 2021. The tax withholding rate on royalties for Indian YouTubers is 15%.
The people who are bloggers/publishers and earn from AdSense or YouTube are exempt from all GST rules. These bloggers/publishers do not have to pay any GST.
If the Youtuber is providing content or services to foreign audiences, it is considered as a zero-rated supply, and therefore, no GST on Youtube is charged on it. But if the Youtuber is providing content or services to the Indian audiences, they have to collect 18% GST from their clients and pay it to the government.
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