Content creation through videos is one of the most popular means used by creators these days & Youtube is one of the most popular platforms where video creators post their video for viewers to view in their channel Youtube places the ads on the videos. As & when the Youtubers meets the Youtube’s monetization criteria, they start getting paid with the Advertisement income through Adsense.
Now, the question arises that whether the Youtubers earning this Advertisement income requires GST registration? In this article, we will discuss Whether Is there any applicability of GST on Youtube Income, Do GST registration is required by Youtubers, When Youtubers need the GST registration, Do Youtubers need to pay any GST and What compliance Youtubers required to meet with respect to GST?
Meaning of GST Registration
GST registration is the procedure through which a taxpayer becomes registered under India’s Goods and Services Tax (GST). The registration process begins with the tax authorities issuing a one-of-a-kind number known as the Goods and Services Tax Identification Number (GSTIN). Once a business has been successfully registered, it must collect taxes on behalf of the government and file GST returns on a regular basis. GST is an indirect tax that went into effect on July 1, 2017, and replaced many indirect taxes previously levied by the central and state governments.
Advantages of GST Registration
The following are the benefits of GST registration in India:
- Simplified Tax Process: GST registration consolidates multiple tax compliances under a single umbrella, making tax payment significantly simpler and less time-consuming.
- Easy to start a business: GST registration gives the business legal status, making it easier to start a business.
- Increased logistics efficiency: GST registration eliminates the need for multiple tax registrations, enhancing logistics efficiency. GST registration enables businesses to take advantage of the composition plan to lower their tax bill.
- Composition Scheme: GST registration enables businesses to take advantage of the composition plan to lower their tax bill.
- Input tax credit: Businesses who register for GST receive an input tax credit that can be used to offset their tax burden.
- Avoiding time-consuming taxation services: GST registration assists small enterprises in avoiding time-consuming taxation services.
- Simple and straightforward online procedure: The entire GST process (from registration to submitting returns) is completed online, making it extremely straightforward and advantageous for new businesses.
Overall, GST registration provides numerous benefits to businesses, making it a mandatory necessity in India
Threshold limit for GST Registration.
The yearly revenue of the business determines the GST registration threshold limit in India. According to the most recent data, firms with an annual revenue of more than Rs. 40 lakhs must register for GST. However, the threshold limit for businesses in some special category states is Rs. 20 lakhs. In India, the GST registration threshold limit for service providers is Rs. 20 lakhs.
However, the threshold limit for service providers in the Northeast and hill states is Rs. 10 lakhs. The minimum yearly turnover requirement for firms to register for GST is the GST registration threshold limit. Businesses must adhere to the threshold level to avoid legal ramifications and get the benefits of GST registration.
GST Registration for Youtubers
Yes, You Tuber’s must register for GST if their total PAN-based revenue reaches Rs.20 lakh in a fiscal year. GST compliance is required for all businesses in India, including content makers. To disclose their income content creators must obtain a GST registration and file periodic returns
Bloggers and You Tuber’s must register for GST if their total PAN-based turnover exceeds Rs.20 lakh in a fiscal year. There is no doubt about it, and GST at 18% applies to all Service Providers, Bloggers, You Tuber’s and other freelancers. As a result, You Tuber’s should check their turnover and seek GST registration if they exceed the threshold level.
Nature of Supply of You Tuber’s
The creators provide a content creation service to You tube, where they generate content and allow You tube to display advertisements on it. As a result, the nature of supply is “Service” in this case. you tube is the recipient of the service, and You Tuber’s are the providers of the service.
Applicability of GST on You Tube Income
The service of creating content for the purpose of generating advertisement space is a taxable supply. Because You tube (the service recipient) is a foreign organization, we need to see the source of supply. Because the service recipient is located outside of India, the site of supply is outside of India in this circumstance.
As a result, if the export prerequisites are met, it may result in service exports. Furthermore, if it is determined that it is an export of services, it will be a zero-rated supply, which implies that service providers (i.e., You Tuber’s) will not be required to charge GST.
If the conditions with respect to export of services are met it is a zero-rated supply
Simply put, it is an export of service- the video creation service provided by You Tuber’s(service provider located in India) to You tube (service recipient located outside India), the place of supply is outside India (since the recipient of service is located outside India), and payment is received in convertible foreign exchange (since payment is received in dollars, which is then converted into INR and remitted to You Tuber’s in India).
So clearly, it’s an export of service so no GST is required to be charged.
GST Rate on You Tube Income.
The GST rate for services performed by YouTubers and bloggers if we consider it as a service then it is 18% (i.e., 9% CGST and 9% SGST or 18% IGST). This rate applies only if the YouTuber is required to register for GST or is already registered for GST.
Wherever YouTubers or bloggers export services, they are considered zero-rated supplies, and no GST is levied as discussed in this article.
Compliance to be fulfilled by You Tuber’s
As it’s the export of services followings compliance need to be fulfilled:
- They will have to file the LUT (Letter of Undertaking).
- GST Return filing will be required.
- GST Input tax credit can also be sought as a refund.
Penalties/Implications of not Registering for GST
The following are the penalties and ramifications of failing to register for GST in India:
- Late registration penalty: The penalty for failing to register for GST will be INR 12,000 or 10% of the tax owed, whichever is greater.
- Non-registration penalty: If a business fails to register for GST, a penalty of INR 10,000 may be imposed
- Increased penalties for minor infractions: Businesses that are obligated to register for GST but do not do so may face increased fines for minor infractions under the GST regime.
- Input tax credit loss: Failure to register for GST results in a loss of input tax credit during the delay period.
- Legal action and prosecution: Businesses who are obligated to register for GST but fail to do so face legal action and prosecution.
Conclusion
In short if we see the parameters than we can say You Tuber’s income comes under zero rated supply of service as it’s the export of services, so no tax needs to be charged. But there is a difference in opinion about it too some consider the You Tuber’s brand deals and Affiliate Marketing Income as a self-employed income and consider it as taxable but as all the parameters of export of services are fulfilled so in our opinion there is no need for You Tuber’s to give any GST tax to government.
