GST on infulencers

[Harshit Sanghvi]

Hi,

Influencers are covered under OIADR and their place of supply is India and they are not eligilble for export benefits. Is it correct?

[KASTURI SETHI]

Pl.elaborate your query with an emphasis on the exact type/nature of influencer.

[Shilpi Jain]

How are they covered under OIDAR?

[Vijay kumar]

I. OIDAR is defined u/s 2(17) of the IGST Act'17 to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,––

(v) online supplies of digital content (movies, television shows, music and the like);

II. Influencers are people with large social media followings. In exchange for free products or monetary compensation, they promote brands among their followers. If the influencer is posting digital content on the social media platform, then it could be classified under OIDAR. He is the supplier of service and as per Sn.13(12) of the IGST Act'17, recipient of OIDAR service is deemed to be in the taxable territory – if any two of the following non-contradictory conditions are satisfied:

i) Location of address presented by the recipient through internet is in taxable territory;

(ii) Credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;

(iii) Billing address of the recipient of services is in the taxable territory;

(iv) Internet protocol address of the device used by the recipient of services is in the taxable territory

(v) Bank of the recipient of services in which the account used for payment is maintained is in the taxable territory; and

(vi) Country code of the subscriber identity module card used by the recipient of services is of taxable territory;

(vii) the location of the fixed land line through which the service is received by the recipient is in the taxable territory.

III. As per Section 13(2) ibid,

The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:

Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

In your case, the place of supply can be outside India also, depending on the location of the recipient of service based on Sn. 13(12) above. Hence, in my view, it is not correct to say that PoS in r/o supply of service by influencer is always in India and that they are not eligible for export benefits. In S.Tax regime also, the relevant provisions were amended on these lines w.e.f. 1.12.2016.

AI Summary

Place of supply rules can render influencer services OIDAR and taxable outside India, affecting entitlement to export benefits. Influencer digital promotion services delivered via social media can qualify as OIDAR where they are mediated by information technology; the place of supply is determined by the recipient's location under deemed-recipient indicia (such as billing address, IP address, card issuance, bank location, SIM country code or fixed landline), and if those indicia locate the recipient outside the taxable territory the place of supply may be outside India, so such supplies are not automatically ineligible for export benefits.