GST on twitter Ad revenue sharing to content creators

GST on twitter Ad revenue sharing to content creators

GST on twitter Ad revenue sharing: According to experts, payment that people receive from X (formerly Twitter) as part of its advertisement revenue sharing plan will be treated as a supply under the GST law and will be subject to an 18% tax. The GST Registration will become applicable if a person’s annual total income from all sources—including rental income, interest from bank fixed deposits, and other professional services—exceeds Rs 20 lakh.

Recently, X (formerly Twitter) started to share advertising revenue with its verified businesses or X Premium subscribers. To be eligible for this revenue sharing program, the account must have received 15 million organic impressions on its posts over the previous three months and have at least 500 followers.

Also Read: GST on Renting of Immovable Property – Residential and Commercial

Content creators on twitter or X are able to set up Ad Revenue Sharing and Creator Subscriptions independently. Many social media users have in the recent past posted tweets about receiving revenue share from X.

According to experts, income from other sources, such as interest and rental income, will also be factored into the calculation of the GST registration threshold in addition to revenue share earnings from Twitter posts. Therefore, the revenues that are otherwise exempt from GST would be included in the calculation of the Rs 20 lakh threshold. However, such exempt income would not be subject to GST.

Individuals and entities that generate more than Rs 20 lakh in revenue or income from services are currently required to register for the Goods and Services Tax. For some special category states like Mizoram, Meghalaya, and Manipur, the cap is Rs 10 lakh.

Also Read: GST Registration Cancellation – How to cancel GST Registration?

Explaining this, an expert gave an illustration and said if an individual earning interest income from banks amounting to Rs 20 lakhs annually who neither pays GST nor is required to take GST registration. Now, if he generates any additional taxable income, say Rs 1 lakh, from platforms like Twitter, he would need a GST registration. GST would be levied at 18 per cent on the amount above Rs 20 lakh, which is Rs 1 lakh in the current scenario.

Therefore, a social influencer’s earnings are subject to annual consolidation if they come from their online presence, which includes any money received from Twitter. Notably, if this income exceeds the Rs 20 lakh threshold, GST registration becomes necessary, potentially resulting in GST liabilities.

“The moot point is not only the income from social influencing but other sources, like interest, which will contribute to the calculation of the threshold for GST registration. Even though interest remains tax neutral even after a GST registration,” experts further added.

“For a content creator in India, share in ad revenue from Twitter would qualify as ‘export of services’ in the nature of OIDAR under GST, considering Twitter is outside India and as a result, the place of supply is outside India,” another expert said.

Also Read: 10 Common mistakes to Avoid When Filing GST Returns

GST Registration Threshold Limits

The GST Council, on considering the demands raised by MSME, increased the GST registration threshold limits. These changes were proposed in the 32nd GST Council meeting held on 10th January 2019. It was subsequently notified by the CBIC. It helps to ease compliance under GST.

Aggregate Turnover Registration Required Applicability
Earlier Limits – For the sale of Goods/Providing Services
Exceeds Rs.20 lakh Yes – For Normal Category States Up to 31st March 2019
Exceeds Rs.10 lakh Yes – For Special Category States Up to 31st March 2019
New Limits – For Sale of Goods
Exceeds Rs.40 lakh Yes – For Normal Category States From 1st April 2019
Exceeds Rs.20 lakh Yes – For Special Category States From 1st April 2019
New Limits – For Providing Services
There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).
Also Read: Mismatch in GSTR-1& GSTR-3B: GST department started recovery
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