It’s the eve of the GST or the Goods and Services Act, which will be effective from the 1st of July. First things first!
What is GST?
It is a uniform tax replacing the several levels of taxes levied by the central government and the state government. The new GST will be applied on the sale and purchase, transfer or barter, lease or import of all goods and services.
Blogging is writing content online. Most companies have blogs integrated on their sites. It increases their access and reach to customers. They update it on a regular basis. People visit the blogs and traffic is generated. This means more ad revenue for the blog. This revenue comes under taxation law.
What is the GST Rate for Bloggers?
Bloggers will now fall under GST rate of 18%
What about Bloggers/Affiliate Marketers?
The answer is YES, it will have an impact on bloggers and affiliate marketers as well. They come under the OIDARS services, i.e. the online information database access retrieval services.
There are many conditions under which we have to get a GST registration. In this post, I’ll be focusing on the conditions for bloggers/affiliate marketers.
Registration to GST is compulsory if ANY of these conditions apply:
- You have a business turnover more than Rs. 20,00,000/- in a financial year.
- In case of some Northeastern states, they fall under a special category and the limit is Rs. 10,00,000 in this case.
- Bloggers who offer goods or services from one state to another.
- Bloggers or affiliate marketers who offer information over the Internet and enable access to data or retrieval service from other countries to someone in India.
If any of the conditions mentioned above apply to you, you should be heading over right now to get your GST registered. Let me make this clearer.
Services Outside State
- Even if your turnover is less than Rs. 20 lakhs, if you are offering your blogging or affiliate site services to someone outside your state, you need to get registered.
- By offering services outside the state, I mean that people from outside your state visit your blog or you get revenue from your blog from other states.
- If you are a blogger and live outside India, and those in India are visiting your blog, you need the GST registration. This regardless of whether you are having an annual turnover of Rs. 20,00,00 or not.
- How about if you are a blogger or an affiliate marketer and earn revenue through advertising? If your advertising revenue comes from within your state, you are clear. No GST registration is required.
- If your ad services are accessed outside the state, you need to get GST registration. This is again irrespective of whether your annual earnings is more or less than Rs. 20,00,000 per annum.
Bloggers Exporting Services
If your blog is not visited by anyone living in India but you are a blogger or an affiliate marketer offering services to those outside the country, you need not get GST registration.
- If you are living in India and offering blogging services outside the country, you need not register for GST, as exporting of services is not chargeable.
- In this case, the blogger, online site owner, service supplier is in India and the recipient of the service is outside the country. So, he is essentially exporting the service.
- The blogger or affiliate marketer gets the payment in foreign exchange that can be converted.
- The place of service must also be outside. This means that:
- The IP address must be outside India.
- The bank account used for payments must be outside India.
- The fixed land line location for receiving the service must be outside India.
- Billing address of the service receiver must be outside India.
- Address of service receivers must be outside India.
Impact of GST on Bloggers/Affiliates Marketers
All bloggers and Affiliate marketers make money through their ads or by the sale of E books or by affiliate marketing. They fall under the e commerce category and are online sellers of goods or services. If you are a blogger, you get revenue from:
- Ads displayed on your blog. You could have pitched these ads on your own or you could use ad networks like Google Adsense and the like.
- Selling e books or listing them in Amazon etc.
- Through Affiliate marketing.
- Native ads or sponsored blog posts.
As an online seller of goods or service, you have to get registered with GST. If you are selling your product or service through Amazon or Flipkart, you need a GST registration. You have to file returns and must pay the stipulated tax. All bloggers are covered under this, as they are the owners of their sites and are offering goods or services online.
What Taxes are You Liable for?
As a blogger or an affiliate marketer, you are liable to pay taxes for:
- Ads that are displayed on your site.
- Revenue from affiliate marketing and revenue earned from sale of ebooks.
- Any other income generated from your blog.
- The minimum limit of Rs. 20,00,000/- is not applicable anymore for bloggers and online businesses.
- If you want to start blogging today, you have to first get the GST registration.
- It is not yet clear whether you need to pay taxes on income obtained from ad networks like Google Adsense and the like. Such income is received in the form of foreign currency and is export revenue by nature. It looks like you need not pay taxes on these.
- There will be strict penalties for those who do not comply. If you are not registered, the fine could be up to Rs. 25,000. If you do not file your returns, the fine is Rs. 100 per day for one return.
Bloggers Getting Income from India
Giving you more clarity if you are a blogger who gets income from within the country.
- Your service is not an export, so it is not exempted.
- All bloggers must pay GST, even if you earn a single rupee from your blog or affiliate marketing in India.
- If you earn anything from outside India, you will be exempt if it comes under export of service.
- The GST tax rate on bloggers in India is 18%
GST Compliance Requirements
Once you are GST registered, you need to do the following:
- File your sales return by the 10th of every month.
- File purchase returns by the 15th of each month.
- File consolidated returns by the 20th of every month.
- Upload all invoices through the government GST website.
I’ve attempted to cover all aspects of GST registration and compliance for bloggers and affiliate marketers in India. Yet, it is pretty complex and everything is not black and white. There are still shades of grey in between and more aspects will be clarified shortly.
The GST is effective from midnight today, that is, from the 1st of July 2017. The countdown begins, so hold your breath in anticipation!!!!
All the information provided in this article is based on the information available as of today and is liable to change as and when the concerned authorities make any amendments.