Income from Twitter's ad revenue sharing: 18% GST for content creators earning over Rs 20 lakh annually

By Anshul

Elon Musk recently made an announcement that subscribers of X Premium (Blue) would receive a share of the company's income. The micro-blogging platform X, formerly known as Twitter, also decided to share a portion of advertisement earnings with subscribers. However, content creators benefiting from this program will be subject to an 18 percent Goods and Services Tax (GST) on their earnings.

Experts suggest that this GST will apply if the total annual income from various sources, including income from X, surpasses Rs 20 lakh.

According to reports from news agency PTI, experts believe that income from X falls under the GST purview. Consequently, a tax rate of 18 percent will be applicable to this income. The tax, however, will only be levied when the combined income from different services, interest on bank Fixed Deposits (FDs), and other sources crosses Rs 20 lakh annually.

To earn from Twitter's revenue sharing program, Elon Musk initially indicated that accounts receiving 15 million organic impressions within 3 months would be eligible. However, this threshold was later lowered to 5 million impressions. Musk also specified that accounts should have at least 500 followers to qualify. On August 8, he announced that Twitter had indeed distributed a share of advertising income to its premium users after they met the eligibility criteria. Users could earn at least $10 at a time through this program.

Users shared their positive experiences, indicating that they had received payments from Twitter for participating in the program. One user reported receiving $120.65 for 21.4 million impressions over 104 days. Another mentioned receiving $241.31 from YouTube for 928,582 views and 6,159,005 impressions.

As per the PTI report, those earning over Rs 20 lakh annually from Twitter, as well as other sources such as interest and rent, will need to pay 18 percent GST on their total income. However, if the income from the Twitter Ad Share program doesn't push the overall income past the Rs 20 lakh threshold, GST won't apply to the other income sources.

Under the existing rules, individuals or entities earning Rs 20 lakh or more annually through services must register for GST. In certain states like Mizoram, Meghalaya, and Manipur, this threshold is lowered to Rs 10 lakhs. Experts cite that the income from Twitter falls into the category of 'income from exports', also known as Online Information and Database Access or Retrieval (OIDAR) under GST. This classification assumes Twitter operates outside of India, and consequently, the place of supply is considered outside India. Therefore, if the total income, including the Twitter Ad Share program, exceeds Rs 20 lakh in a year, 18 percent GST will be applicable.