1.YouTube Platform Use by YouTubers:

Nature of Transaction: YouTube provides a platform for YouTubers to upload videos, acting as a service provider, with YouTubers as service recipients.

Tax Implications: Under Section 13(12) of the IGST Act, 2017, this transaction is treated as ‘Import of Service’ since YouTube (service provider) is outside India, and the YouTuber (service recipient) is in India. However, since YouTube does not charge YouTubers for this service, there is no GST liability for the YouTuber under the Reverse Charge Mechanism (RCM).

2.Income Earned by YouTuber:

Nature of Transaction: YouTube shares a portion of ad revenue with YouTubers. Here, YouTubers are service providers, and YouTube is the service recipient.

Tax Implications: This is considered ‘Export of Service’ as per Section 2(6) of the IGST Act, 2017. The service is zero-rated under GST, meaning no GST is payable, but the YouTuber must comply with certain conditions like filing a Letter of Undertaking (LUT).

3.Income Earned by YouTube from Advertisement Companies:

Nature of Transaction: YouTube acts as a service provider to advertisement companies.

Tax Implications: This scenario also falls under ‘Import of Service’, and the advertisement companies (service recipients) are liable to pay GST under RCM.

4.Premium Subscription by YouTube:

Nature of Transaction: YouTube offers a premium subscription service to individuals.

Tax Implications: This is an ‘Import of Service’ transaction. However, since the recipient is a non-taxable online recipient, YouTube is responsible for discharging GST as per section 14 of the IGST Act, 2017.

Consider the following examples for better understanding

Example: Imagine a YouTuber, Priya, based in Delhi, who uploads cooking tutorials on YouTube. In this case, YouTube (located in the US) is the service provider, and Priya is the service recipient. According to the IGST Act, this setup falls under ‘Import of Service’. However, since YouTube doesn’t charge Priya for uploading her videos, there is no GST liability for her under the Reverse Charge Mechanism.

1.Using YouTube Platform by YouTuber:

Example: Imagine a YouTuber, Priya, based in Delhi, who uploads cooking tutorials on YouTube. In this case, YouTube (located in the US) is the service provider, and Priya is the service recipient. According to the IGST Act, this setup falls under ‘Import of Service’. However, since YouTube doesn’t charge Priya for uploading her videos, there is no GST liability for her under the Reverse Charge Mechanism.

2.Income Earned by YouTuber:

Example: Let’s say Priya’s cooking channel becomes popular, and YouTube starts displaying ads on her videos. YouTube shares a portion of this ad revenue with Priya. This is an ‘Export of Service’, as Priya (in India) is providing content to YouTube (outside India). The transaction is zero-rated under GST, meaning Priya doesn’t have to pay GST on this income. She does, however, need to file a Letter of Undertaking (LUT) to comply with GST regulations.

3.Income Earned by YouTube from Advertisement Companies:

Example: Suppose an Indian company, Spicy Foods Ltd., decides to advertise its products on YouTube, including on channels like Priya’s. In this scenario, YouTube is the service provider, and Spicy Foods Ltd. is the service recipient. This transaction is classified as ‘Import of Service’ under GST, and Spicy Foods Ltd. is liable to pay GST under the Reverse Charge Mechanism.

4.Premium Subscription provided by YouTube:

Example: An individual, Rohan from Mumbai, subscribes to YouTube Premium to watch videos without ads, including Priya’s cooking tutorials. In this case, YouTube is providing a service to Rohan. As per GST laws, this is an ‘Import of Service’. However, since Rohan is a non-taxable online recipient, YouTube (the service provider) is responsible for discharging the GST on this transaction.

Terms Used

• Non-taxable Online Recipient: This term typically refers to a person or entity that receives services or goods through online means but is not liable to pay tax on those goods or services under the GST regime. For example, if you buy a book online from a foreign website that doesn’t charge GST, you’re a non-taxable online recipient.
• Letter of Undertaking (LUT): A Letter of Undertaking is a document that a business submits to the government. It declares that the business will follow all the GST rules and regulations. This is often used by exporters who export goods without paying IGST with the promise that they will obey the GST laws.
• IGST (Integrated Goods and Services Tax): IGST is a part of GST, which is a unified tax imposed on the supply of goods and services from one state to another within India. Think of it like a tax on items that cross state borders. The revenue collected from IGST is shared between the state and the central government.
• Zero-rated supplies: In GST, zero-rated supplies refer to certain goods and services that are taxed at a 0% rate. The aim is to avoid taxation on exports and some other specific supplies to promote trade. Businesses can still claim credits for the GST paid on inputs used to make these supplies. It’s like saying, “This product or service won’t be taxed, but you can still get back the tax you paid on things used to make it.”