GST on Content Creators & YouTubers: Understanding the Impact on All Income Sources

In this dynamic world, people are venturing more into unconventional professions. A considerable amount of time is being spent by people in consuming content on social media platforms, and that has led to a significant boom in the YouTube, blogging, and affiliate marketing industry.

What is Blogging, Affiliate Marketing, and YouTube?

Before analyzing the transactions from a GST point of view, let us first understand what blogging, affiliate marketing, and YouTube mean.

• Blogging: The process of writing a blog, an online journal in which one can share his thoughts about a particular subject with readers.
• Affiliate marketing: The process by which an affiliate earns a commission for marketing another person’s or company’s products.
• YouTube: Almost two decades back, Google came up with the platform called YouTube, which allows people to showcase their content in the form of videos on any subject matter.

Income Streams for Content Creators and YouTubers

People uploading content on these platforms are usually referred to as bloggers, content creators, and affiliates. There are various income streams through which they earn, but the major sources are as follows:

• AdSense income: AdSense is a free-of-charge, simple way to earn money by displaying ads next to your online content. With AdSense, you can show relevant and engaging ads to your site visitors and earn from it.
• Brand promotions: Brand promotion is the marketing communication strategy to inform, persuade, convince, and influence the decision-making process of buyers when they choose a particular brand. The person promoting the brand is being paid by the brand.
• Affiliate marketing: A marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.

GST Implications on Income Sources

The taxability on such income under GST law is analyzed in detail below.

Whether the Service Classifies as “Supply”

As per the provisions of GST law, tax is levied only on those transactions which qualify to be a “supply”. Supply is defined as sale, transfer, barter, exchange, license, rental, lease, or disposal of any good, service or both made or agreed to be made for a consideration in the course or furtherance of business. The content creators or bloggers provide a platform to the companies to advertise their goods or services and charge a consideration for the same. Similarly, affiliates also provide referrals and in turn get consideration in the form of commission. Hence, the services provided by them can be classified as supply in GST law, and to determine the taxability, we need to analyze in which category of service the said supply would fall in.

Amongst different categories of services discussed in the GST legislation, one such relevant category is Online Information and Database Access or Retrieval services (OIDAR). These are the services whose delivery is mediated through information technology over the internet and involves minimal human intervention and includes electronic services such as:

• Advertising on the internet
• Providing cloud services
• Provision of e-books, movie, music, software, and other intangibles through telecommunication networks or internet
• Providing data or information, 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

In the case of service of providing one’s platform for advertisement, brand promotions, and referrals to different companies, the following factors are present:

• Delivery of services is mediated through the internet and information technology only
• The services are impossible to provide without information technology
• Further, the services are automated and involve minimal human intervention

The services provided by the bloggers, content creators, and affiliates are complying with all the conditions stated above and therefore, could be classified as supply of an OIDAR service. In the said supply, the supplier of service is the blogger, content creator, and affiliate; and the recipient can be any of the advertising company or brand.

However, in respect of affiliate marketing, there are few voices making rounds in the market which contend that such services can also be considered as an Intermediary service under GST. We have touched upon the same later in this article.

Place of Supply

To determine whether the supply provided by the supplier is a domestic supply, import of service, or export of service, place of supply provisions needs to be analyzed. For OIDAR supplies, as per law, if the recipient and supplier of service are in different countries, it would be considered as an export of service. If the recipient and supplier of service are in the same country, it would be considered as a domestic supply.

Conclusion

In conclusion, GST on YouTube income is a significant consideration for content creators in India. YouTubers are subject to an 18% GST rate on services. GST compliance is crucial, and non-compliance can result in penalties. Content creators may be eligible for GST refunds in certain circumstances. It is essential for content creators to understand their tax obligations and comply with the applicable laws. GST compliance is essential to running a business, and content creators must obtain a GST registration and file periodic GST returns.

By understanding the GST implications on all income sources, content creators can ensure they are meeting their tax obligations and taking advantage of available exemptions and concessions. With the rise of influencer marketing and the growth of the digital economy, it is crucial for content creators to stay informed about GST laws and regulations to avoid any penalties and fines.

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