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Most of us spend hours every day on social media. The easiest way to stay in touch with friends, family, and coworkers is through social media. It is also thought to be the most up-to-date way to find out about new products, current events, and the latest fashion trends happening around the world. So, most brands now work with social media influencers to get their products and services in front of people all over the world. Social media sites like YouTube, Instagram, Facebook, and Twitter are giving these people a lot of chances to make a wide range of products and services, including those in the tourism, fashion, cosmetics, lifestyle, and other industries.
So, today we’ll talk about what GST means for Instagram and social media influencers.
The various tax implications on social media influencers
Most YouTubers and people who are popular on social media get a lot of followers by posting regularly on sites like YouTube, Facebook, Snapchat, etc. So, these groups are taxed the same way as any other business or organisation that makes money. People who have a lot of influence are often self-employed or run their own business as sole proprietors.
The income from these influences is treated as company income and is taxed at the Standard Income Tax rate.
YouTubers and social media influencers can make money by:
Partner programmes
Blog post
Online donations
Paid advertisement on social media
Becoming a brand ambassador or representative
Affiliate marketing: putting together projects together
Promotion of own products like videos, photos, digital courses, podcasts, and web blogs.
All of these are considered income from a business and are taxed as such.
The income of these influencers and bloggers is taxed as “Profits and Gains from Business and Profession,” which means that the government takes a cut of what they make. If an influencer makes more than INR 1 crore in total gross income in a year, the government has to check their books. Also, the rate of TDS will be figured out based on the type of service or transaction that was made. The people who have a lot of power may also need to do TDS Return Filing.
Understand the Implication of GST on social media/Instagram influencers
Under the GST law, the services that influencers and YouTubers offer are called Online Information and Database Access or Retrieval Services (OIDAR). When you use these services, news and other information are mostly sent to you over the internet using information technology.
So, an influencer or YouTuber who makes INR 20 lacs or INR 10 lakhs in special category states has to get GST Registration. Because of this, they will also have to file a GST Return. Also, if the influencer sells or provides services to registered customers in a different state, they must register for GST, no matter how much they earn in total. 18% of the influencers’ services and products are subject to the GST rate. This is made up of 18% of the Integrated Tax and 9% of the Central GST (CGST) and State Tax (SGST) (IGST). THE IGST IS TOTALLY DEPENDENT ON WHETHER THE YOUTUBER OR INFLUENCER IS SELLING IN THE SAME STATE OR IN ANOTHER STATE.
In any case where services are exported, the GST rate is 0%. The YouTuber or blogger who wants to export their service will have two choices. Either they can pay IGST and get a refund directly to their account, or they can share a Letter of Undertaking, LUT, to export their services. Most of the ads on Google Inc. and Google AdSense show that all of the supplies made by Instagram Influencers and YouTubers are tax-free because the people who get them don’t live in India.
Deductions
These people can also subtract their business costs from their total earnings. This lowers their total taxable income, which in turn lowers their tax bill. But keep in mind that these costs are only tax-deductible if they are “absolutely necessary” or “normal and necessary” for your business as an influencer.
Some of the most basic needs are:
Fees for software and subscriptions
Net and communication expenses
Home office costs like rent and utilities
Supplies for the office and business costs like transportation and travel costs.
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Tag : GST Filing, GST Registration, TDS Filing