What is GST? Is GST replaced Income Tax? Am I liable to pay GST? Why should I pay GST? Is Google AdSense publishers covered under GST regime? I am not selling goods to anyone then why should I pay GST? I am providing free services to my blog/ website visitors, then why should I liable for GST? I am earning foreign currency by selling advertisement place on my blog to persons outside India. Is it compulsory to obtain GST registration?What is GST? Is GST replaced Income Tax? Am I liable to pay GST? Why should I pay GST?
Is Google AdSense publishers covered under GST regime? I am not selling goods to anyone then why should I pay GST? I am providing free services to my blog/ website visitors, then why should I liable for GST? I am earning foreign currency by selling advertisement place on my blog to persons outside India. Is it compulsory to obtain GST registration?
There are lots of such questions regarding GST asked by Showeblogin live visitors. I am here with you to clear each and every doubt on GST for bloggers or Freelancers or website owners who earn income from AdSense, Affiliates Marketing, Referral programmes, selling of eBooks, serving paid contents and Direct Advertisements etc.
We shall discuss this topic in very simple and concise way to clear all your doubts about GST registration, GST tax rate and GST tax payment and penalty to be made by blogger and website owners in India.
Quick reply to Bloggers for GST
Here is quick reply for certain bloggers who have different source of income viz. AdSense, YouTube, Affiliates, E-Book sells, referral income from Amazon or Flipkart and direct advertisements etc. However, detail analysis has also been done for each blogger categories in the next heading “How GST impact on Blogging income”.
If you earn only from Google AdSense as publisher, then you are not required to pay GST.
If you have created YouTube Channel and monetizing your uploaded videos on YouTube, then also you need not register for GST or pay any GST tax to Government.
AdSense and YouTube Income:
Those bloggers/publishers whose income source is AdSense as well as YouTube, they are also exempt from any GST rules and regulations. No need to pay GST for that blogger.
If you have joined affiliate program to earn commission on every purchase through the affiliate links, you have to register yourself for GST.
If you sell either e-Books or paperback, you have to register for GST irrespective of the fact that you are selling that books in digital format or paperback i.e. physical form.
If you receive income through direct advertisement, then also you have to get GSTIN. That means you have to register for GST in case of selling ad Space directly to advertisers.
How GST Impact on Blogging Income
Tax in India:
In India, there are two type of taxes which should be paid by tax payers to the Indian Government. The first one is Direct Tax (DT) and other is Indirect Tax (IDT). Direct tax is levied on total income earned by taxpayers whereas indirect taxes are levied on goods as well as services.
Taxation for Bloggers:
I think you have no doubt about direct tax i.e. Income Tax. As we know, Income Tax must be paid by each and every taxable blogger. That means, those bloggers whose total income exceeds threshold limit determined or set every year by respective Finance Act shall file ITR (Income Tax Return) and pay tax for the relevant Assessment Year.
GST stands for Goods and Services Tax and comes under indirect tax. The name itself denotes that GST tax shall be levied on supply of all goods or services or both. Supply of service is leviable to tax in accordance with the provisions of Goods and Services Tax (GST) Act, 2017. That means, bloggers covered under GST regime as because they provide/ supply services. However, weather a blogger is taxable under GST Act 2017 or not shall depends on various factors which are discussed below in detail.
GST Act 2017 for Bloggers in India
GST is applicable on Goods as well as Services. Bloggers provide services on internet i.e. they provide online services through their blogs and hence he/she has to check whether he/she covered under the provisions of GST Act or nor.
GST Act 2017:
GST tax shall be levied as Dual GST separately but concurrently by both the Govt. viz. the Central Government and the State Government.
- Central Government levied CGST for intra-State supply and IGST for inter-State supply.
- State Governments including Union Territories with legislatures levied SGST or Union territories without legislatures levied UTGST for intra-State supply.
Central Goods and Services Tax Act i.e. CGST Act 2017, State Goods and Services Tax Act i.e. SGST Act 2017, Union Territory Goods and Services Tax Act i.e. UTGST Act 2017 and Integrated Goods and Services Tax Act i.e. IGST Act 2017.
After analysis of relevant provision of GST (CGST/IGST/UGST) Act 2017 and rules made thereunder, I have come to the point that bloggers are specifically covered under the provisions of GST Act 2017. However, some of them require compulsory registration to pay GST tax and some bloggers are not required to pay GST tax in India. How? Just read following notes on GST for Indian Bloggers.
According to Section 2(17) of IGST Act, 2017, Online Information and Database Access or Retrieval Services (OIDARS) means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology 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; and
- online gaming;
Thus, as a blogger you are covered under the above provision of GST Act 2017 as supplier of Online Information and Database Access or Retrieval Services.
A) GST for AdSense Publishers and YouTubers
Place of Supply:
Section 13 of IGST Act 2017 shall apply to determine the place of supply of services where the location of the supplier (Blogger) of services or the location of the recipient (Google AdSense) of services is outside India. As the location of Google AdSense is outside India, the place of service shall be decided in accordance with Section 13 of IGST Act, 2017. For your reference purpose, I have provided address which you may see your Google AdSense payment receipt:
Google Asia Pacific Pte. Ltd.
70 Pasir Panjang Road, #03-71,
Mapletree Business City,
Note that the Tax Identification Number (TIN) or Goods and Services Tax Identification Number i.e. GSTIN of Google AdSense is 200817984R.
In accordance with the provision of Section 13(12) of IGST Act 2017, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services. That means, bloggers covered under this provision and the place of supply of service is the place of Google AdSense/YouTube.
Export of Service:
Now, the provision of Section 2(6) of IGST Act 2017 defines Export of Services which means the supply of any service when, ––
- the supplier of service is located in India;
- the recipient of service is located outside India;
- the place of supply of service is outside India;
- the payment for such service has been received by the supplier of service in convertible foreign exchange; and
- the supplier of service and the recipient of service are not merely establishments of a distinct person;
Thus, bloggers are exporting services as supplier (You) located in India, recipient (Google) is located in outside India and place of supply is also outside India as discussed above and payment received in dollar ($) i.e. in convertible foreign exchange and you and Google are not merely establishments of a distinct person.
Zero Rated Supply:
According to the provision of Section 16(1)(a) of IGST Act 2017, export of services is zero rated supply. That means, bloggers are providing zero rated services to Google AdSense and Google YouTube for running advertisement on their blogs and YouTube videos.
But, now question arise that whether such bloggers are liable for registration under GST Act 2017. For that you have to go through these provisions of Chapter VI of GST Act.
Registration and GST tax liability:
As per Section 22 (Persons Liable for Registration) of CGST Act read with Section 20 of IGST Act 2017, a blogger is not required to register under GST Act as because he is not providing taxable service i.e. Services which is leviable to tax under GST Act. Bloggers who are earning AdSense Income or income from YouTube Channels are providing zero rated supply of service to Google.
Further, as per Section 24 (Compulsory Registration) of CGST Act 2017 read with Section 20 of IGST Act 2017, a blogger not falling any categories of persons which shall require compulsory registration under GST Act, 2017.
However, the provision of Section 23 of CGST Act 2017 shall be applicable for bloggers as a person engaged exclusively in the business of supplying services that are not liable to tax or wholly exempt from tax under the CGST Act 2017 or under the IGST Act 2017. In other words, bloggers who only earn online money from Google AdSense/YouTube are suppling services which are wholly exempted from GST tax.
Now, if you read the provision of Section 2(47) of CGST Act 2017, you shall understand the fact that Exempt Supply means supply of any services which attracts nil rate of tax i.e. 0% (Zero Rates) and therefore a blogger specifically covered under the provision of section 23 of CGST Act 2017 and not liable for registration.
That means, if you have blog or website and only source of income is from Google AdSense, then there is no need to either apply for GST registration or pay GST tax. In other words, if you are blogging from India and receive payment from Google AdSense, you are not required to register yourself under GST Act 2017.
Other point of view for Optional reading:
Now, it is clear that you are not liable for GST tax as Google AdSense Publisher. You may also think in a different way for more clarity and let us discuss this matter in respect of Google AdSense whether you are required to pay GST tax or not. Ask a simple, are you know the person whose advertisements are running on your blog page or YouTube videos? How many advertisers are bidding for your blog from India or outside India? What is the GST registration number of that advertisers? Answer will be big NO.
Bloggers don’t know the recipient of the supply of services to whom they charge GST and raise an invoice. On the other hand, the advertisement shown on your YouTube videos and blogs are shown by Google AdWords. Advertisers buy/ purchase ad slots on your website and YouTube videos through Google AdWords.
Google AdWords covered under 2(45) of CGST Act 2017 as electronic commerce operator and it must be get registered in compliance with the provision of Section 24 of CGST Act 2017. Therefore, AdWords is required to collect tax at source (from Advertisers) and shall be paid to the Government by AdWords (e-commerce operator) within 10 days after the end of the month in which consideration is collected for taxable supplies (Ad space or Ad slot) made through it by other suppliers (Bloggers or YouTubers).
If you have AdWords account, you may notice the invoice where GST tax shall be charged from you (Advertiser) for showing ads on bloggers site. Thus, Google AdWords is already collecting GST and deposit it to the Govt and therefore, you as a blogger not required to pay any GST.
B) GST for Affiliate Marketers and E-Book Sellers
Place of supply:
As we have already discussed above that the place of supply of online information and database access or retrieval services shall be the location of the recipient of services.
Location of Recipient:
Person receiving such services shall be deemed to be located in the taxable territory, if any two of the following noncontradictory conditions are satisfied, namely: ––
- the location of address presented by the recipient of services through internet is in the taxable territory;
- the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;
- the billing address of the recipient of services is in the taxable territory;
- the internet protocol address of the device used by the recipient of services is in the taxable territory;
- the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;
- the country code of the subscriber identity module card used by the recipient of services is of taxable territory;
- the location of the fixed land line through which the service is received by the recipient is in the taxable territory.
Central GST shall be levied on all intra-State supplies of services on the value determined at notified rate and collected in prescribed manner and shall be paid by the taxable person. Supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply.
Is blogger covered under Central GST 2017? Yes! Those bloggers who earn online money through providing services of affiliate marketing or selling digital books or direct advertisement to the recipient located within the State are covered under CGST Act 2017.
Registration for Intra-State Supply:
A supplier (blogger) shall be liable to be registered under Central GST Act in the State or Union territory from where he makes a taxable supply of services, if his aggregate turnover in a financial year exceeds ₹20 lakhs. However, in case of special category States i.e. Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand, the aggregate turnover limit is only ₹10 lakhs.
Therefore, if you are selling Ad Space directly to the advertisers or digital books or affiliates within your state from where you make a taxable supply of services then you have to register for GST under section 22 of Central GST Act 2017. That means if you supply such services viz. digital book selling and affiliate any product, you shall have to charge GST from the recipient of such supply.
Similarly, Integrated GST shall be levied on all inter-State supplies of services on the value determined at notified rate and collected in prescribed manner and shall be paid by the taxable person. Supply of services where the location of the supplier and the place of supply are in two different States or two different Union territories or a State and a Union territory, shall be treated as a supply of services in the course of inter-State trade or commerce.
Is blogger covered under Integrated GST Act 2017? Yes! Those bloggers who earn online money through providing inter-State services i.e. selling eBooks, accept direct advertisements and affiliates products of recipient (Advertisers) located within India are covered under IGST Act 2017.
The above exemption limit of ₹20 lakhs or ₹10 lakhs has not been available to those bloggers who are making any inter-State taxable supply i.e. selling of eBooks or Ad slots to persons located outside the state and therefore fall under the provision of compulsory registration under section 24 of Central GST Act 2017.
In other words, the exemption limit of ₹20,00,000 is only valid for small service providers who generate their income by providing services within state, but if you are a service provider and generating income from outside State, then GST registration is mandatory and exemption limit shall not apply. Additionally, if any person including bloggers who are generating income from outside State than the exemption limit of ₹20 lakhs shall not apply.
Export of Services:
If you are selling eBooks and Ad space to the recipient outside India then you are supplying exempted service and therefore, you are neither required to apply for GST registration nor liable to pay GST tax.
In other words, you are exporting zero rated supply as in case of AdSense publishers and therefore out of GST regime. So, please go through the discussions made for Google AdSense Publishers in part A above for more clarity.
Penalty for No Registration:
If you as a blogger liable to be registered under GST Act but fails to obtain GST registration, then you will be liable to pay a penalty of ₹10,000 or an amount equivalent to the tax evaded, whichever is higher.
Penalty for No payment of GST Tax:
If a blogger registered for GST but tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilised then he shall be liable to a penalty of ₹10,000 or 10% of the GST tax due from such blogger, whichever is higher.
Any blogger, who contravenes any of the provisions of GST Act or any rules made, shall be liable to a penalty which may extend to ₹25,000.
GST Tax rate on Bloggers:
Bloggers shall be responsible for charging GST tax rate @18% from recipient of services provided by bloggers through selling of eBooks, affiliate products and selling ad space on their blogs.