Goods and Services Tax or GST, integrated into India’s indirect taxation system in 2017. It is a destination-based, multistage tax that has subsumed all previously existing indirect taxes under it.
One of the principal differences between GST and other indirect taxes is that it is collected from the point of consumption of goods and services and not from the point of origin like all other previous taxes.
Such a change in the collection procedure created some confusion amongst taxpayers regarding its implications.
One such area of uncertainty was the tax liability on the income generated by bloggers and YouTubers through the use of advertisement portals like Google AdSense.
Even though individuals know what is GST, most are not clear about its application on such services.
Most Indian bloggers make use of portals like Google AdSense through which they earn revenue when the ad placed on their blogs receives a hit. Next is all you need to know about GST implication on income earned through Google AdSense.
Goods and Services Tax applicability for bloggers
Agreeing to Section-7 of the CGST Act 2017, every supplier, whether of goods and services, is considered as a service supplier. Under this section, bloggers are treated as suppliers since they provide a platform to advertisers for displaying their advertisements.
The nature of these services provided by bloggers is considered to be online information and database access or retrieval services. Following is the latest impact of GST on these services.
GST applicability on bloggers for Google AdSense
For Goods and Services Tax implication on Google AdSense, the matter of the location of the service provider and recipient taken into account.
Section 13 of the IGST Act 2017 is used to determine the place of supply of service where the location of the supplier (blogger) and the recipient (Google AdSense) is not within India.
Since the location of Google AdSense is in Singapore, Section 13 of IGST will be implemented to ascertain the place of supply of service.
In this case, Section 13(12) will implement, and the location of Google AdSense will be considered to be the location of supply.
Here, the blogger’s work will be considered as export of services, since the location of supply is outside of India. Thus, according to the provision put forth by Section 16 (1)(a) of IGST Act 2017, this export of services will be considered as a zero-rated supply.
When a service is considered to be zero-rated, it becomes free of Goods and Services Tax. Thus, GST does not apply to income generated through Google AdSense.
Is the application of GST beneficial?
While it sounds like good news to be free from its application, there are several GST benefits that one can enjoy through their tax payments. These are as follows –
- ● The integration of the GST regime has made the country’s tax system digitized and has offered strong technical support to make the system more organized.
- It has eliminated the cascading effect of taxation.
- It has been immensely helpful for India’s Micro, Small and Medium Enterprises, making them less dependent on “tax experts” by facilitating a simplified return filing system.
- The applicability of GST has also proven useful for a business owner to avail loans more quickly. Individuals who file their GST returns on time can avail of business loans more easily from financial institutions like Bajaj Finserv. The high loan amount can then be utilized to fund business initiatives much more quickly.
The application of GST has, thus, introduced several benefits, particularly for small business owners. Therefore, if you are a goods and service supplier, you must learn all about GST to avail of the benefits imparted by it. You can then register for GST online by following all the requisite details.
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