As already discussed in previous article (GST implication of income earned through Google from Youtube) youtubers or bloggers don't need to register themselves if their aggregate turnover is less than the prescribed limit which is 20 lacs for normal state and 10 lacs for special category states that are Arunachal Pradesh, Himachal Pradesh, Uttarakhand, Sikkim, Tripura, Nagaland, Manipur, Assam, Mizoram and Meghalaya though they are providing Interstate services (export classify as interstate supply) and it is interesting to note that this exemption is not applicable to person who makes interstate supply of goods but is applicable to interstate supply of services.
The aggregate turnover includes the value of exported goods and services, exempted goods and service and interstate supplies.
What if turnover exceeds 20 Lacs or 10 Lacs as may be the case?
Then the youtuber has to register himself under the GST Act and follow the compliances. The youtuber or the blogger will have two options-
- Option 1: Export of service (to Adsense) by charging by charging IGST @18% and then claiming refund
- Option 2: Export of service (to Adsense) without charging and furnishing Letter of Undertaking (LUT)
Option 1: A doubt may be arising that if supply is zero-rated then how can youtuber charge tax. Gst law is bit different and by this the Government ensures that this is the genuine export case. It is pertinent to note youtuber/blogger/ OIDAR service provider cannot charge GST from recipient as recipient is outside India but service provider himself have to assess the liability and deposit it with the government and when he receives the consideration that is Convertible Foreign Exchange then he may claim the refund by filling RFD 01 which is available on the common portal and other necessary formalities like submitting certain documents with the jurisdictional GST officer. The necessary condition for claiming refund should be that consideration should be received within one year from the date of the provision of service. The proof of realization like FIRC copies is required.
Option 2: Claiming refund is really a cumbersome process in the present indirect tax regime. Besides this fund is also blocked. So the Government has provided us with another method in which exporter can export goods/services without payment of IGST and simply furnishing Letter of Undertaking (LUT). LUT is basically an undertaking whereby the exporter undertakes that he is supplying goods/ service without payment of IGST and if he fails to bring foreign exchange consideration within a stipulated time then he shall be liable to pay IGST along with applicable interest. LUT is a self- declaration form which is available on the common portal.
Other Compliance: It is necessary to note that registration comes with compliances. Once registered, can't escape from the compliances. Gst Invoice is required to be raised though the adsense may not require it. Invoice should mention the invoice no, date, the value of service and other required details. It will help in filing returns. Youtuber/ Blogger will also have to file GSTR 1, GSTR 3B and Annual return.
What if the youtuber/blogger provides service inside India?
It is a bit difficult to understand the Google agreement as Google has several entities located n different countries. There may be the case when the recipient is Google India Pvt Ltd because in the act it is the specified person providing OIDAR service from outside India need to compulsory take GST registration so in this case place of supply shall be India and not outside India. Youtuber/ blogger also earns through direct advertisement and affiliate marketing to persons located in India. Then it will be the case of normal supply and not exports though the consideration may be received in convertible foreign exchange. The service provider will have to charge CGST & SGST @9% each if service recipient is in the same state otherwise IGST @18% if he is registered. Exemption limit is same as above i.e. if aggregate turnover less than the threshold limit then no need to register under GST Act.
Compliance: The compliance is also same like raising the invoice, filing GSTR 1, GSTR 3B, annual return and other compliance. GST mechanism on other incomes earned by youtuber/blogger is the same be it Adsense income, affiliate marketing, direct advertisement, etc
I hope this topic is now clear. All the efforts have been taken to clear this topic. But despite this, if any topic has been left or is unclear then please comment below. Suggestions are welcome.