GST for social media influencers

CA Puja Sharma | Last updated: 21 April 2022

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Quick Summary

Social media influencers, generating income through various online channels, are subject to Goods and Services Tax (GST). They are classified under Online Information and Database Access or Retrieval (OIDAR) services, meaning their income is taxable. Depending on whether services are provided from India or abroad, and to registered or unregistered persons, specific GST registration thresholds and filing requirements apply. The standard GST rate for OIDAR services is 18%, with variations for intra-state and inter-state supplies.

Social Media refers to websites and applications that enable users to create and share content or participate in social networking. It is an electronic form of media that allows people to communicate and share information, ideas, opinions, personal messages etc., using the internet or mobile phones. Around 60% of the global population uses social media these days, and this index is increasing day by day. The role of social media has increased for most businesses to reach a wider audience, thereby, there is increased demand for social media influencers.

Social media influencers refer to individuals or entities who regularly post on social media platforms like youtube, Instagram, Facebook, Snapchat etc., and have many followers. They generate revenues from their posts through partner programs, sponsored social blog posts, brand ambassadors, affiliate marketing, etc.

The income earned from the channels mentioned above is taxable in the influencers' hands under the head Income from Business or Profession. The tax liability will depend upon the different slab rates applicable in the case of individuals mentioned under the Income Tax Act, 1961. They must also get their accounts audited if their total revenue in a financial year exceeds a specified limit mentioned under the Act. Besides individuals, a company, partnership firm or an LLP can also become an influencer on social media. The tax rates applicable to various business entities are different from that of individuals.

Apart from Income Tax, GST is also a critical perspective to be taken care of for successful entrepreneurs. Bloggers and social media influencers are categorized as OIDAR - Online Information and Database Access or Retrieval services under GST. Under the GST Act, OIDAR means services whose delivery is mediated by information technology over the internet or an electronic network. The nature renders their supply essentially automated and involves minimum human intervention, and is impossible to ensure in the absence of information technology, including electronic services. For example:

GST for Social Media Influencers: Your Guide

Advertising on the internet
Providing cloud services
Provision of e-books, movies, music, software, and other intangibles through telecommunication networks
Providing data, retrievable or otherwise, to any person in electronic form through a computer network
Online supplies of digital content ( movies, television shows, music and the like), digital data storage
Online gaming

GST registration is the most important part of GST. For OIDAR service providers, GST registration will depend upon the following points:

1. OIDAR service providers providing services from India must obtain registration under GST if their aggregate annual turnover exceeds Rs. 20 Lakhs during a financial year. This limit is Rs. 10 Lakhs for special category states.

2. Mandatory GST registration is required if the OIDAR service provider provides services from a place outside India to a person in India other than a registered person.

Other than registration, compliance to be made under GST is also divided into two categories:

1. Providing OIDAR services from outside India- File return in Form GSTR 5A on or before the 20th day of the month succeeding the calendar month or part thereof
2. Providing OIDAR services from India- To file all returns which apply to regular category taxpayers. File return in Form GSTR 1 and GSTR 3B monthly or quarterly.

The rate of GST applicable on OIDAR services is 18%. If the services are provided within the state(intra-state), the service provider will charge CGST-9% & SGST-9% on the taxable value. On the other hand, if the supply is outside the state(inter-state), the service provider will charge IGST-18% on the taxable value.

Further, if the OIDAR service provider in India provides services outside India, it will be classified as an export of services. The service provider will have two options -

1. Charge 18% on the bill and claim a refund by filing a refund application on the GST portal.
2. Charge 0% GST on the bill after issuing a LUT or bond.

The author is the founder of M/s Puja Sharma and Associates, a Chartered Accountant firm in Jaipur. The team of professionals at the firm drive technology-enabled service offerings. Our internal and external processes are driven by technology at every stage.

FAQ :

OIDAR services, or Online Information and Database Access or Retrieval services, are those delivered via the internet or an electronic network with minimal human intervention, such as online advertising or digital content supply.

Influencers providing OIDAR services from India need GST registration if their annual turnover exceeds Rs. 20 Lakhs (Rs. 10 Lakhs for special category states). Mandatory registration is required if services are provided from outside India to a non-registered person in India.

The standard GST rate applicable to OIDAR services is 18%. This is charged as 9% CGST and 9% SGST for intra-state supplies, and 18% IGST for inter-state supplies.

Influencers in India providing services outside India can either charge 18% GST and claim a refund, or charge 0% GST after obtaining a Letter of Undertaking (LUT) or bond.

Influencers providing OIDAR services from outside India file Form GSTR-5A monthly. Those providing services from India follow the same return filing procedures as regular taxpayers, typically filing GSTR-1 and GSTR-3B monthly or quarterly.