Today, more individuals are turning to platforms like YouTube and personal blogs to share knowledge, express creativity, build communities, and earn income. Monetization options such as Google AdSense, affiliate marketing, sponsored content, and memberships have made it possible for creators to generate significant revenue online. However, as digital income grows, so does the responsibility of complying with tax laws—particularly under India’s Goods and Services Tax (GST) regime.
Nature of Income from YouTube and Blogging
Income earned through AdSense—whether from YouTube videos or blog advertisements—is paid by Google Ireland or Google Singapore in convertible foreign currency. The Indian creator essentially provides advertising space to a foreign entity, which classifies the transaction as a service export under GST law. According to Section 2(6) of the IGST Act, such income qualifies as an “export of services” if the supplier is in India, the recipient is outside India, the payment is in foreign currency, the place of supply is outside India, and the transaction is not merely between establishments of the same entity.
This means AdSense revenue from Google Ireland or similar foreign-based platforms is considered a zero-rated export of service under GST.
GST Registration Requirement
GST registration is mandatory if your aggregate turnover exceeds ₹20 lakh (or ₹10 lakh in special category states). However, even if your income is below the threshold, registration becomes mandatory if you are engaged in export of services. Therefore, YouTubers and bloggers receiving payments from foreign entities like Google must register under GST to comply with the law, even if their income is modest.
Export of Services: Options Under GST
There are two routes available for zero-rated supplies under GST:
- Filing a Letter of Undertaking (LUT): If you file an LUT with the GST department, you are not required to pay any GST on your export income. This is the preferred method for most creators, as it avoids cash flow issues.
- Paying IGST and Claiming Refund: If you have not filed an LUT, you must pay Integrated GST (IGST) at the rate of 18% on your export income. You can then claim a refund of the IGST paid. While legally valid, this method is less preferred due to the time it takes for refunds to be processed.
GST Compliance for Content Creators
Once registered under GST, creators must comply with certain obligations. They are required to raise GST-compliant invoices for their services, even if the GST rate is zero under the LUT route. Monthly or quarterly returns—GSTR-1 and GSTR-3B—must be filed regularly. If the annual turnover exceeds ₹2 crore, an annual return in GSTR-9 is also required.
Creators are also entitled to claim Input Tax Credit (ITC) on business-related expenses such as laptops, cameras, software subscriptions, or internet services. If the LUT route is chosen, accumulated ITC can be claimed as a refund.
Domestic Income: Taxable at 18%
Apart from AdSense, creators may earn from brand sponsorships, affiliate marketing, product reviews, or conducting workshops—especially when such revenue is sourced from within India. These are considered domestic services and are subject to 18% GST once the creator is registered.
In such cases, creators must charge GST on their invoices and deposit the same with the government. Failing to comply with these requirements may result in penalties or denial of ITC.
Invoicing Requirements
Even for export services, proper invoices must be generated. These invoices should include the name and address of the foreign recipient, description of the service, invoice number and date, the value of the service in Indian rupees or foreign currency, and a declaration stating that the supply is made under LUT without payment of tax.
Income Tax Considerations
In addition to GST, creators must report their AdSense or other online income in their income tax returns under the head “Income from Business or Profession.” Depending on the type of income and business structure, ITR-3 or ITR-4 may apply. If tax has been withheld at source (for instance, by Google), creators can claim credit for the same by filing Form 67.
