GST—the term has become a focal point of discussion across India among corporate honchos and laypersons alike. Touted as the largest ever tax reform in India, it is expected to affect the entire industry landscape.
Your digital marketing business is no exception. Let’s see what GST is and how it will impact digital marketing.
What is GST?
GST stands for ‘Goods and Services Tax’. It is an indirect tax that will substitute varied Central and State taxes like Value Added Tax (VAT), service tax, and Central Excise, among others. A single tax will be levied all across the nation for everyone.
GST is aimed at reducing the cascading effect of taxes that lead to a tax on taxes.The new system also promotes ease and transparency by integrating online tax registration and payments under its purview.
It came into effect from 1st July, 2017.
How is GST different from previous taxes?
Under GST, the existing service tax will be changed from 15% to 18%. However, since input credit would be available from materials as well as services, this 3% increase is not expected to have great repercussions.
(For those who are wondering what input credit is: When you buy services and materials to create your service or product, you pay tax on each of these.Hence, when you need to pay tax on the final service or product you sell, you will be able to reduce the tax that you have already paid.)
Who needs to register for GST?
There are many criteria for registration. Let us focus only on the ones concerning the digital marketing industry.
You must register your business for GST if:
- Its annual turnover is more than INR 20 lakhs (INR 10 lakhs in certain states)
- It makes an interstate supply of goods or services
You must also register if your business publishes digital content.Why? Because in almost all cases, digital content will be read or seen by people outside the state, hence fulfilling the second criterion.
Why should you choose a registered vendor?
GST is a system that promotes self-policing. It requires businesses to check that all their suppliers are adhering to taxation laws.
When you buy services from a registered vendor, not only will you benefit from a hassle-free, legally compliant, and transparent process but also avoid paying unnecessary penalties.
If you take services from an unregistered vendor then you will have to pay a reverse charge under GST. This means that you will have to pay the complete GST of the unregistered vendor. You can claim this tax back, but the process is tedious and also affects the cash flow of your business.
Worrisome? Fret not! Superscribe is registered under GST. Work with us to boost your brand with compliance-friendly, high-quality content!
How will GST affect the digital marketing industry?
Overall, GST will reduce the cost of production, logistics, and tax for a number of sectors. This will leave businesses with more money to spend on marketing activities. It means that you can churn out creative campaigns with high-quality content at lower prices in the days to come.
GST is also believed to boost the economy and GDP of India. In turn, this will result in flourishing marketing and advertising sectors.
Looking at all of these factors, we can look forward to GST giving a boost to digital marketing and content marketing industries in India.