Implication of GST on Social Media/Instagram Influencers

As a social media/Instagram influencer in India, it is important to understand the implications of the Goods and Services Tax (GST) that was implemented in July 2017. GST is a comprehensive indirect tax that replaced various state and central taxes and aims to create a unified tax structure across the country.

Under GST, social media/influencer marketing services are classified under the category of ‘Online Information and Database Access or Retrieval Services’ and are subject to a tax rate of 18%.

This means that if you are providing social media/influencer marketing services to clients, you will have to charge them an additional 18% tax on top of your service fee. It is important to note that this tax is applicable to both Indian and foreign clients.

However, there are certain exemptions to this tax. If your annual turnover is less than Rs. 20 lakhs (or Rs. 10 lakhs for businesses in special category states), you do not need to register for GST or charge GST to your clients. Additionally, if you are providing services to clients outside India, you do not need to charge GST.

Another important aspect to consider is the input tax credit (ITC) system under GST. Under this system, if you have paid GST on any input services or goods that you have used to provide your services, you can claim a credit for the amount paid. This means that you can reduce your tax liability by the amount of GST paid on your inputs.

However, in order to claim ITC, you must have a proper documentation system in place. You should maintain invoices and receipts for all your purchases and ensure that they match with the invoices you issue to your clients.

It is also important to note that social media/influencer marketing services are still a relatively new sector and there are still some grey areas in terms of taxation. For example, it is unclear whether sponsored posts or brand collaborations fall under the ambit of GST.

Overall, it is important for social media/Instagram influencers to stay updated with the latest GST regulations and ensure that they comply with the tax laws in order to avoid penalties and legal issues in the future.