How GST shall impact the Content writers in India – Impact of GST on Content writing after 1st July, 2017

1.0 Introduction

After the GST council meeting on 18th June, 2017, it is all clear that GST shall be implemented from 1st July, 2017 and it is going to change the way people work in our country. Like every industry and segment of the business is impacted by the GST, content writers are also feeling heat.

Hence, to clear up the picture for them, we have decided to write the article on how GST shall impact the content writers after 1st July, 2017.

 

2.0 Who are content writers and how they are different from blogging?

Content writer is a term which is used to define the person who writes on the internet for another person against a sum of money. They maybe freelancers or may own or work under a SEO company.

In nutshell, any person who writes for another person against a sum of money is known as content writers doesn’t matter whether on internet or not.

But content writers are not bloggers because bloggers writes for their website and they don’t charge anything for it rather they capture more traffic through blogs and earn from advertisement.

If you are a blogger, then read how GST shall impact the bloggers in India

 

3.0 Content writers under Current taxation law

Under current law, content writers are liable to pay service tax at 15% subject to basic exemption limit of Rs.10 lakh. However, most of the content writers don’t register for service tax in India because there is no proper legal mechanism under which they can be caught. Hence, they enjoyed the government ignorance.

But now, if you don’t comply with GST, then you might end up in big trouble.

 

4.0 GST Registration for Content Writers

As per GST law, if any person is supplying any goods or service outside the state, then GST registration becomes mandatory. For content writers, we may have two categories:

• One who has all the clients within If you have all the clients within the state, then you are eligible for basic exemption limit of Rs.20 lakh under GST.state:

• One who has any single client outside the state: If you are earning even a single rupee from outside the state, then you shall become liable for GST registration in India and you shall not be liable to claim the basic exemption limit of Rs.20 lakh.

 

5.0 Reverse charge under GST if you are not registered – Very Important

This is something very serious which we are going to discuss. If you are not registered under GST, then no company shall appoint you as a content writer. This is strange but true.

As per GST law, if any person takes services from a unregistered service provider, then the person who is taking the service, shall liable to pay GST to the government on behalf of the unregistered person.

Hence, even if you are under basic exemption of Rs.20 lakh, you still needs to register to get clients.

 

6.0 Penalty for no registration

If any person fails to take GST registration, then he shall be liable for two penalties

• For No Registration – Up to Rs.25,000
• For no return filing – Rs.100 per return per day.

 

7.0 No Exemption (Threshold) limit of Rs.20 Lakh for Content writers

As stated above, any person including bloggers, content writers who are generating income from outside India or outside the state, than the exemption limit of Rs.20 lakh shall not apply.

 

8.0 GST Tax rate on content writers – How to content writers shall be taxed under GST

The content writers shall be liable to pay tax at 18% on services with full ITC. Full ITC means the credit of GST on any input service can be set off against the the output tax liability.

 

9.0 If content writing is done for client outside India, whether it can be treated as export of service?

To treat any service as export of services, one needs to fulfill the following conditions:

• The supplier (content writer) of service is located in India

• The recipient of service is located outside India

• The place of supply of service is outside India

• The payment of such service has been received by the supplier of service in convertible foreign Exchange.

• Not relevant for Content writers.

 

10.0 Cost and Time for GST registration

The total cost for GST registration is Rs.1,599 and it shall be registered within 3 to 7 working days.

 

11.0 Documents required for GST registration for Bloggers

The primary step before commencing GST registration is to gather all the required documents. The lists of required documents are as follows:

1. Photo of the Authorised person

• Photo of proprietor in case of proprietorship
• Photo of Managing partner/designated partner in case of firm/LLP
• Photo of Managing director/whole time director in case of Companies

 

2. Proof of Registration

• Partnership deed in case of partnership firm
• Registration certificate in case of LLP and Companies
• No registration certificate required in case of proprietorship

 

3. Proof of Principle place of business

• If you own the property, then ownership document like electricity bill, tax receipt/property tax receipt or registry documents of that place.
• If you are on rent, then copy of rent agreement/lease agreement with electricity bill in the name of the owner.
• If you neither own the property nor on rent, then submit electricity bill along with a copy of NOC.

 

4. Other documents

• Scanned copy of bank statement/bank passbook or scan copy of canceled cheque containing Name, bank account no., MICR, IFSC and branch details including code
• Authorisation form

 

12.0 Compliances after GST registration for Content writers

Once you are registered under GST, the content writers shall need to comply with the following every month:

• Issue tax invoice for each payment received.
• Upload each invoice issued to the government.
• File 3 monthly returns
• Maintain purchase and sales register
• Pay all the due taxes before 20 of the following month.

The above is only the glimpse of compliance and may be more or less depending upon case to case basis.

 

13.0 Composition scheme for content writers

Composition scheme is the benefit extended to the small business so that they can be prevented from heft compliances each month. However, unfortunately the composition scheme does not apply to services and hence, content writers shall need to pay taxes normally and no benefit of composition scheme is available to them.

 

14.0 Conclusion

We have tried to write the impact of GST on content writers so that they can prepare for what is coming. GST is very typical and hence, we recommend you to take expert help in this so that you can save yourself from the claws of this stringent tax.

In case you have any query, please write to us at info@hubco.in.

 

Related Links:

• GST Registration
• GST Return Filings
• GST Software