The entire Blogger community is upset after the GST is implemented. This blog post will remove all your confusion and troubles about GST for Blogger.
What is the tax system of India?
There are two ways tax in India –
- Direct Tex
- Indirect Tex
1. Direct Tex
Under the direct tax, part of your income you will be paid to the Income Tax Department or govt of India.
Like – if you are earning money by doing some job or you are reducing money by business, then part of your earnings has to be paid to the Income Tax department.
If your one year (annual) income is less than Rs 3 lakh, then you do not have to pay income tax. But if your annual income is more than 3 lakh then you will have to pay income tax.
2. Indirect Tax
Indirect Tax means when you sell goods or provide any service to someone or customer; then you have to collect tax from the customer and give it to govt.
Means that customer will have to pay tax, not you.
Direct Tex VS Indirect Tax
|Direct Tax (Income Tax)||Indirect Tax (GST)|
|Direct tax is called income tax.||Indirect tax is called GST|
|Direct tax applies to income||Indirect tax applies to product|
|In Direct tax, you have to give your money to govt||In Indirect tax, you have to take money from the customer and give it to govt.|
Does Blogger have to pay GST or not?
After understanding Direct Tax and Indirect Tax, you may have understood; Blogger has to pay GST or not.
Blogging is not a business. Sharing knowledge is called blogging. But bloggers earn money in a variety of ways. Like-
- Google Adsense (or any advertise network)
- Affiliate Marketing
- Direct Advertisement/Sponsorship
- Selling E-book
- Freelancing or Offer any services (Like Web development, logo design etc.)
1. GST for Google AdSense
Case 1: Suppose you are working in a company, and you are providing web development service to that company. So in this condition, you do not have to pay GST because you are part of that company.
Google AdSense case is also something like this.
The third party company advertises with Google because Google claims that we have many websites where we will show your ad. So here’s the thing to understand that our deal is not happening with the customer, Google is going to deal with the customer, in this situation Google will have to pay GST. And our website is part of Google because we are giving it free to advertise it, then google is giving us some income as salary. Like google gives to his employee.
That’s why I am saying, suppose you are running an advertisement in facebook, So facebook is not charging any tax from you, Because it already includes tax. And he pays to govt. In the same way, Google also imposes a hidden tax on the ad and pays it to govt.
If you have ever ad campaigned on facebook or google then you would know that there is a separate policy for every country.
Case 2: Now suppose that Google says that we do not pay any GST and the publisher has to pay GST and we and our publisher are partners.
Therefore 32% of GST will have to pay Google and 68% GST will have to pay by you because Google gives 68% of the revenue to us and 32% revenue holds itself.
According to this, if the total earnings are Rs. 100 then 68 rupees will come to us, and 32 rupees will keep Google itself. And GST rate is 18%. So we have to pay 12.24 rupees GST and Google have to pay 5.76 rupees GST.
And I do not think there is such a rule in GST.
Case 1 VS Case 2
After analyzing Case 1 and case 2 it comes out that there is no GST of any kind on earning from Google Adsense (or any advertiser network) because google already pay gst. You just have to pay income tax.
2. GST For Affiliate Marketing
If you are promoting the product of a company in affiliate marketing, then when someone purchases a product through you, then a commission is received in return that means the company will give some part of its earnings, earning is not based on GST. It’s based on the price of the product. That means it has already paid GST.
Example: Suppose you use Hostgator affiliate, then when a visitor buys some product by clicking on your link then the price of that product is added along with the tax.
So it is clear that the affiliate marketing company already pay GST and GST has the rule that it appears only once in any product.
You will not have to pay a GST of earnings from affiliate marketing; you just have to pay income tax, If you are eligible.
3. GST For Direct advertisement or Sponsorship
When a company direct advertisement with you, you will pay GST
Example: If you are advertising a company product in 2000 rupees on your blog, then you have to pay 360 rupees(18%) GST, with this you will earn 1640 rupees. If you want to earn Rs 2000 from that service, then you can get 2000+ 360 (GST) i.e. Total 2360 rupees.
Note: When your annual turnover is above 20 lakh then you have to pay GST. If your turnover is less than 20 lakh then you do not have to take GST from the customer, nor do govt need to pay GST.
4. GST For E-book sell
Yes! You have to pay 18% GST on e-book selling because the e-book is not a product, the e-book is an online service.
Note: When your annual turnover is above 20 lakh then you have to pay GST. If your turnover is less than 20 lakh, you are not under GST.
4. GST For Freelancer
Whether you offer a service from your blog or offer any service from a freelancing website (up work, Fiverr, peopleparhour) and if your turnover is more than 20 then you have to pay 18% GST.
Note: If you offer a service 100-dollar then you can add extra 18% GST and offer 118-dollar.
Blogger earnings have not diminished due to the arrival of GST.
Those earning from Adsense and affiliate marketing do not have to pay GST. AdSense and affiliate earner only pay income tax.