This post has been updated as of March 2018.
GST i.e. Goods and Services Tax is expected to come into effect in India from 1 July 2017. GST is a uniform, indirect tax throughout India to replace various taxes levied on sale, transfer, purchase, barter, lease, and/or import of goods and services by the central and state governments. While there is still a lot of information to be officially announced, some clarity on a number of laws indicate that GST will also have a considerable impact on bloggers and other affiliate marketers in India.
So, here’s how the introduction of GST will impact bloggers and the affiliate industry:
Under GST, bloggers and affiliate marketers fall under the online information and database access or retrieval services (OIDARS) i.e. those who provide electronic services like advertising on internet, cloud services, digital data storage, digital content (movies, e-books, music, shows), online gaming, data or information retrievable in electronic form, etc.
According to the information so far received, you need to obtain GST registration compulsorily, if you fulfill a list of conditions. Out of that long list, and after the latest update from government, there are now three conditions which concern bloggers and affiliate marketers. They are:
- Your turnover in a financial year exceeds Rs 20lakhs (Rs 10 lakhs for Special category states)
- You supply online information and database access or retrieval services from a place outside India to a person in India
- You supply online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person
Earlier, when GST had just been announced, bloggers and affiliate marketers, supplying services outside of their state, were liable to register for GST even though they are not earning Rs 20 lakhs or more annually from your blog or affiliate website. [Supplying services outside your state means the blog is being visited and read by people outside of your state and if your blog is making commission from outside of your state.] Now they are exempted from GST registration if their earnings are less than Rs 20 lakhs.
According to the third point, bloggers living outside India but supplying services in India to unregistered parties are liable to get GST registration if their annual turnover exceeds Rs 20 lakhs. But if you are supplying services from outside India to a registered party in India then the liability of paying GST falls on the recipient of services, not you.
What is the GST rate for bloggers?
Bloggers fall under the 18% GST rate.
What if a liable individual does not register for GST or commits a fraud?
In case, someone evades GST registration or does not pay tax or makes short payments, they will be charged with a penalty of 10% of the tax amount due or a minimum of Rs 10,000.
In case, someone commits fraud while filing GST, they will be charged with a penalty of 100% of the tax amount evaded/short deducted etc. or a minimum of Rs 10,000. The offender will also be charged with a prison term if the tax amount evaded exceeds Rs 100 lakhs.
The penalty for late filing of GST is Rs 100/ day for each CGST and SGST plus interest at 18% per year. There is no penalty for late filing of IGST.
How will blogging services delivered outside India be handled under GST?
Income from export of services is exempt from GST. However, GST registration is still compulsory just the way filing Income Tax Returns is compulsory even though you don’t fall in the tax bracket. In this case, you have to furnish a bond or Letter of Undertaking stating that it is export of services and you have to file GST returns for 0% GST.
For an affiliate marketer, the export income comes through PayPal or wire transfer, then you don’t have to collect GST. even AdSense income falls under export of services.
Maintain all the records of your business because the authorities can ask you for the details, anytime.
You have to apply for the refund through Form RFD 01 within 2 years from relevant date and it has to be certified by a CA.
A service will be considered export of services only if:
The supplier of service (blogger or website owner) is located in India
The recipient of service is located outside India
The payment of service is received in convertible foreign exchange
The place of supply of service is outside India
If your blog or website is serving to a recipient which does not fall under any of the below mentioned conditions then your place of supply of services is considered outside India:
- Location of address given by the recipient of service is in India
- Credit/debit card or any other cards used for payment has been issued in India
- Billing address of recipient of service is in India
- IP address of device used by recipient of service is in India
- Bank of recipient in which account is used for payment is in India
- Country code of SIM is in India
- Location of fixed land line through which service is received by recipient is in India
Which online professions are liable for GST?
Freelancers- Freelance writers, developers, designers, digital marketers who earn more than 20 lakh per year.
Bloggers- Bloggers who earn more than Rs 20 lakh/ year from their own blog through ads or affiliate commission or through sponsored articles
Affiliate Marketers- Website owners earning affiliate commission (more than Rs 20 lakhs/ year) through various affiliate networks or programs like Amazon, Flipkart etc.
Owners of e-commerce website or online marketplaces earning through selling goods/ services
YouTubers – YouTubers who are earning more than Rs 20 lakhs per year, through Indian clients
Digital Marketers or Social Media Marketers and Agencies – if their business is above 20L per year
Small businesses can run their business on their own name or as a proprietorship firm. If you have a valid PAN card, you can register yourself with GST on your own name. In that case, while registeration your business name will be your own name.
You can register for GST at https://reg.gst.gov.in/registration
The application process is quite simple; you just have to fill in your personal details and follow the steps.
In Legal Name of Business, you can enter your own name if you are running a Propietor business. Once your application is filled, you.
Keep soft copies of documents needed for the application ready to be uploaded. You can know what documents you require here. Just enter Constitution of Business (i.e. proprietor, partnership etc.) and Nature of Possession of Premises (i.e. own, rented, leased etc.) and you will get a list of documents needed.
Submit the application within 15 days of filling it. When your application is approved, you will get your GST number.
Many big companies like Facebook are asking for GST numbers from all freelancers. So, it is better to register for GST because you will be able to claim the benefits of input credit on the expenses you make for running your business.
This means whatever GST you pay for buying goods and services for running your business will be returned to you as GST credits, which can be used to pay your GST when you file the returns.
E.g. If you spend Rs 1000 on Facebook Ads and paid Rs 180 as GST to Facebook, then while filing GST returns, your net payable GST will be minus the GST you paid for Facebook services.
However, to be able to claim input credit, you have to provide your GST number to all these companies so that it can be tracked online.
Similarly, GST charged on your telephone connection, broadband connection, laptop, AC, office rent etc. can be claimed back while filing returns. So, while buying anything for your work ask the seller to include your GST number in the bill.
GST Filing and Due Date:
Currently tax payers have to file two GST returns: GSTR 1 and GSTR 3B
GSTR 3B is to be filed monthly by all tax payers. The due date for it is 20th of the succeeding month. E.g. The GSTR 3B for February 2018 is to be filed by 20 March 2018.
GSTR 1 is to be filed quarterly for all tax payers whose turnover is less than Rs 1.5 crore. It is to be filed before the end of the succeeding month. E.g. GSTR 1 for January 2018 to March 2018 is to filed by 30 April 2018.
GSTR 1 is to be filed monthly for all tax payers, whose turnover is more than Rs 1.5 crore. The due date for it is 10th of the succeeding month. E.g. The GSTR 1 for February 2018 is to be filed by 10 March 2018.
To stay up-to-date on developments in the blogging and affiliate marketing world and to know more about the impact of GST on blogging, you can bookmark this blog and/ or sign up with Cuelinks.
If you have any queries, doubts or more information relating to GST, do share them with us in the comments section.
[Source: This article is based on research done by the Cuelinks’ Finance Team.]