Question ID : 44646

GST implications on music distributor

Dear Forum, I would like to inquire about the tax (gst) implications for a music distributor who publishes albums for musicians and receives music royalties on their behalf from platforms like Spotify, depositing them into their bank account before paying the royalties to the artists. Should these royalties be taxed under GST, or are they exempt? Additionally, who is responsible for paying this tax?

Here, the music royalty received by the music distributor would be taxable in the absence of any exemption from GST. It will be taxable in the hands of music distributor unless music distrbutor is acting as a pure agent and satisfying all the conditions of pure agent. Further, if platforms like Spotify are foreign companies, then such services would be treated as export of service. The entire transaction need to be understood and each nature of service to be examined separately.