Introduction
Affiliate marketing — earning commissions for promoting products or services — has become a significant income source for bloggers, influencers, and website owners. The question arises: Is affiliate marketing income subject to GST?
This guide explains the taxability, registration thresholds, and compliance obligations.
Legal Framework: Taxability of Affiliate Income
Affiliate Marketing as a Service
Affiliate marketing income is consideration for promotional services provided to the merchant. It is a taxable supply of services under GST.
GST Rate
Affiliate marketing services attract 18% GST.
Registration Requirements
Threshold Limit
For service providers, the threshold for GST registration is ₹20 lakh (₹10 lakh for special category states).
Inter-State Supply
For inter-state supply of services, registration is mandatory regardless of turnover.
Voluntary Registration
Affiliates with turnover below the threshold can register voluntarily to claim ITC.
Compliance Obligations
- Issue Invoices: Issue tax invoices for affiliate commissions.
- File GSTR-1 and GSTR-3B: Report affiliate income and pay GST.
- Maintain Records: Maintain records of commissions earned.
- Claim ITC: Claim ITC on business expenses.
Documentation Requirements
- Tax Invoice: With GSTIN, SAC code, and applicable GST rate.
- Commission Reports: Documentation of commissions earned.
- Payment Records: Proof of payment.
Best Practices
- Monitor Turnover: Track aggregate turnover regularly.
- File Returns on Time: Ensure timely filing.
- Maintain Records: Maintain all commission records.
- Seek Professional Assistance: For compliance requirements.
Conclusion
Affiliate marketing income is subject to 18% GST. Affiliates must register once turnover exceeds the threshold or when making inter-state supplies. Proper invoicing and record-keeping are essential.
Earning affiliate marketing income? Anuj Desai & Associates provides expert guidance on GST compliance. Contact us today.
Contact us:
- Email: office@anujdesaiassociates.com
- Phone: 9619456656
- Website: https://anujdesaiassociates.com
- LinkedIn: linkedin.com/in/ca-anuj-desai-122547230