In this GST case study, TaxMatic provided a detailed opinion on the GST applicability on YouTube income received by CA Rachana Ranade. The income includes payments from Google AdSense for video advertisements and YouTube memberships, credited in convertible foreign exchange.
As per Section 2(6) of the IGST Act, a transaction qualifies as export of services if it meets five conditions:
- Supplier is in India
- Recipient is outside India
- Place of supply is outside India
- Payment is received in foreign currency
- Supplier and recipient are not merely establishments of a distinct person
All these conditions are satisfied in this case.
- Supplier: CA Rachana Ranade (India)
- Recipient: Google Asia Pacific Pte Ltd (Singapore)
- Place of supply: Outside India (Google servers located in the US)
- Payment: In foreign currency
- Distinct entities: Not related establishments
Hence, this supply qualifies as an inter-state supply under Section 7(5) of the IGST Act and is treated as an export of services, making it a zero-rated supply under Section 16.
There are two options for GST compliance:
- Export with payment of IGST and claim a refund
- Export without payment of IGST under a Letter of Undertaking (LUT)
Conclusion
YouTube income falls under the export provisions. Creators and businesses earning from global platforms should treat such income as zero-rated export of services under GST.