Now every blogger worrying about GST and how it will effect on their income after announcing that the GST will be applicable on Bloggers by the Indian Government. In this post, I’ll try to answer the most of the doubts raised by Indian bloggers about what is GST and How GST Will Impact On Bloggers.
What is GST?
Goods and services tax (GST) is an indirect tax which was introduced by the Government of India and effect from July 1st 2017. GST applicable throughout India and it replaced the multiple taxes levied by the State and Central governments which includes central excise duty, customs duty, service tax, surcharges and VAT. Direct taxes like income tax and corporate tax are not affected by GST.
GST is levied on all transactions and all types of services such as purchase, sale, transfer, lease and import of goods/services. GST rates are separated in 5 different slabs 0%, 5%, 12%, 18% and 28%.
How GST Will Impact On Bloggers:
Now coming to our topic, how GST will impact on bloggers?
As per IGST act 2017, below clause was clearly explained and almost all internet services are fall under GST.
(17) “Online information and database access or retrieval services” 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
As per above clause, GST will be applicable on the services which we provide to our customers. Before moving in-depth of the article I want to clarify one thing to all fellow bloggers who are worrying about their blogging money, we no need to pay GST from our pockets. We are service providers and we should collect the GST 18% from the customers who are using our services and we need to pay the same to the government.
As a blogger, we make the most of the income from below sources.
- Displaying 3rd party advertisements on our blog such as Google Adsense or any other ad networks.
- Selling ad space to our clients.
- Selling e-books directly from our website or from any e-commerce website.
- Affiliate marketing.
- Sponsored posts.
Now will check, how GST will be applicable on above services.
GST Will Be Applicable On 3rd Party Advertisements?
NO. GST will be applicable only on services. You are not providing any service directly to the advertiser. You are just displaying ads on your website on behalf of ad networks. Ad networks will collect GST from their advertisers and they pay commission to the publisher. So GST will not applicable on displaying 3rd party advertisements on your blog such as Google Adsense or any other ad networks.
GST Will Be Applicable on selling ad space to our clients?
Yes, selling your website ad space to the client is falls under service. So you should collect the GST on the total amount offered to the client.
If you offered USD 300 for ad space, you should collect 18% GST on 300$. So total amount will be 300$+18% GST.
GST Will Be Applicable on selling e-books?
Yes, selling E-Book to the client is falls under service. So you should collect the GST on the total amount.
If your e-book cost is INR 1000, you should collect 18% GST on INR 1000. So total amount will be INR 1000+18% GST = 1180. Now your total e-book cost will be 1180 and should collect the same from the customer.
GST Will Be Applicable on Sponsored posts?
Yes, posting sponsored content on your website falls under service. So you should collect the GST on the total amount offered to the client.
If you offered USD 300 for Sponsored post, you should collect 18% GST on 300$. So total amount will be 300$+18% GST.
GST Will Be Applicable on Affiliate commission?
No, here also we are not providing any services directly to the buyer, we will just suggest the product to the buyer. Merchant will collect GST from their buyers for the products which they are selling to the buyer.
But if we raised an invoice for the commission, GST will be applicable. They need to pay the GST to you and you need to pay the same to the government. Some companies like Cuelinks, we need to raise the Invoice and request them for our commission payment. In this case, GST will be applicable. We need to raise the invoice to Cuelinks with GST and will pay us with GST by deducting 2% TDS.
As per understanding from this post till now, we no need to pay GST on Affiliate commission and 3rd party advertisement but applicable only on Sponsored posts, selling e-books and selling ad space.
Now, will check some more questions about GST registration and when it will be applicable.
When Is GST Applicable To Bloggers as per Government?
You need to get the GST registration if you fall under any below conditions.
- Annual turn over exceeds 20 lakhs. (for special categories limit has been fixed to 10 lakhs.)
- If there any inter state supply or services.
According to the first point, we no need to get the GST registration if your annual turn over not exceeds 20 lakhs. But as per the second point, GST registration is mandatory for the bloggers as your services are not limited to a single state where you are residing.
Is mandatory for all bloggers to obtain GST registration?
Yes, all bloggers should obtain GST registration regardless of your income.
My only income is from ad networks and affiliate marketing. Still, I need to get the GST registration?
Yes, all bloggers should obtain GST registration regardless of their income source.
As per second condition, if there is any inter state supply means we need to get the registration. When we are speaking in bloggers view inter state supply means, when our blog visited by other state persons it falls under GST.
My turnover is less than 20 lakhs, still GST applicable to me??
Yes, all bloggers should obtain GST registration regardless of their income and income sources as per second condition mentioned above.
For Which Invoices, GST Will Be Applicable??
GST will be applicable for the Invoices generated from 1st of July.
What Is The Applicable GST Rate?
18% GST will be applicable for the Invoices generated from 1st of July.
Main points under GST:
GST will be applicable on any invoice that we raised to any party/company for the payment.
- If we raised an invoice for commission also GST will be applicable. They need to pay the GST to you and you need to pay the same to the government. Some companies like Cuelinks, we need to raise the Invoice and request them for our commission payment. In this case, GST will be applicable. We need to raise the invoice to Cuelinks with GST and will pay us with GST by deducting 2% TDS.
- All bloggers should collect the GST for their services.
Whether their turn over exceeds 20 lakhs or below 20 lakhs, all bloggers should obtain GST registration.
How GST Will Impact On Bloggers:
GST not only will impact on our income but also on expenses. Let’s check how.
How GST Will Impact On Bloggers Income:
- As a service provider, all bloggers should collect the GST for their services offered to any clients. So indirectly all our service rates, for example, e-book cost, ad space cost and sponsored cost will be increased as we need to add 18% GST on all our products or services.
- This cost will be born by the customer only but it may impact on our regular income. Our e-book prices and other services cost will increase due to GST, so it may reduce our sales.
If your sales and income not reduced due to GST, you are a very lucky blogger.
How GST Will Impact On Bloggers Expenses:
First of all, GST will indirectly impact on our blogger income but directly impact on our expenditure. Let’s check how.
- All hosting services rates will increase and we need to pay with 18% GST.
- Email marketing tools rates will increase.
- Premium plugins and themes rates will increase.
- Facebook ads, Google ad words rates will increase.
- Computer, camera, webcam
- Stock photos
All blogging tools and stuff rates will increase due to GST, So directly our expenditure will increase.
How GST Will Impact On Bloggers Day To Day Life:
Apart of income and expenditure, GST Will Impact more On Bloggers Day to Day Life. Let’s check how.
- Every registered tax payer should furnish returns.
- Returns to be filed even there is no business activity during the return period.
- Input tax ledger, cash ledger should maintain on a continuous basis.
Now, will check how GST should be calculated and how the invoice should be.
How GST is levied:
In a simple way, we need to raise CGST 9% + SGST 9% in case of intra state supply of goods and in the same way, IGST 18% will be applicable in case of inter state supply of goods
For example, if we raise the invoice to the company or person living in the same state CGST 9% + SGST 9% will be applicable. If we raise an invoice to the company or person living in the other state IGST 18% will be applicable.
GST Invoice Should Contain The Following Information:
- Name, address and GSTIN of the supplier
- Invoice number and date
- Name, address and GSTIN of the recipient
- HSN code and goods
- Description of goods and unit
- Total value
- Taxable value
- Rate of tax
- Signature or digital signature of the supplier
This is a knowledge based post and written this article to help the bloggers who are worrying about GST. I’ve not gone depth in GST and just written which is helpful for the bloggers.
I hope this article helped you. Comment and Let me know if you have any doubts on GST. Share this post with your blogging friends which will help them.