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Why do Content Creators on Twitter to pay GST?

Tanmay Bhatt has 6.6 million followers on X (previously, Twitter). And that kind of a following surely generates him income, right? But do you know that he has to pay GST on it*? Wait, what?! But doesn't GST mean Goods and Service Tax?


Let us simplify all of this for you


All of us know how good Tanmay is at what he does. But how does he earn his money? And let us keep our discussion restricted to X. Well, he gets a percentage of the revenue he helps X generate. This is arrangement is called as Ad Revenue Sharing. And apart from sponsorship fees, this forms the bulk of most creators' income.



That's fine but why is it covered under GST?

To understand that, we'll need to understand what forms the G and S in GST.

Crudely,

  1. Goods include any kind of movable property.

  2. Services are anything other than goods, but excludes monies and securities.

Ahem, ahem, isn't that the way to make sure everything under the sun gets taxed?

But yes, the service that Tanmay provides to X in increasing the ad revenue is being compensated by X to Tanmay by sharing a portion of it. And this constitutes Supply of a service under GST and is tax is leviable.


But at what rates?


Well, that's the whole buzz. Experts say this income will be taxed at 18%.

This news comes after Elon Musk announced that subscribers of X Premium (Blue) will be eligible to receive their share in the ad revenue if they fulfil certain conditions.


What are these conditions, you ask?

  1. You need to have at least 500 followers, and

  2. If your account has more than 15 million impressions on your post in a span of any three months.

All right. So does everybody who gets a share from X need to pay GST, file returns and comply with a hundred other regulations?


The answer is a relieving NO.


You see, GST is applicable only if your earnings exceeds ₹20 lakhs (₹10 lakhs in case of special category states like Manipur, Mizoram, Nagaland and Tripura among others) in a year. That seems like a very generous threshold. But it covers all your total earnings in a year. Now that includes other incomes too, like house rent receipts and other professional services rendered.


While we've tried to simplify the jargons and the nuances of taxation, we acknowledge the fact that it's really difficult for someone like a content creator to have the time and patience to understand taxes, be it GST or Income-tax. Gosh, wouldn't it be nice to have someone who knows these intricacies to minimise your burdens?


And that's where we come in! Whether you're a small business looking to get some clarity on GST or an individual who wants to make sure you're GST compliant, we at Sawingz, have got your back. Get a free consult with us today. All you need to do is book a meeting through the calendar widget on our homepage, or call/text us at 78920-37507.


X announced its new ad revenue sharing arrangement and now you know what it implies for content creators.


(*If he exceeds the thresholds)



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