GST on YouTube AdSense Income in India: Do You Need GST Registration and LUT?

If you are GST-registered and your particular AdSense arrangement satisfies all the conditions for an export of services, the supply is zero-rated. An eligible registered exporter can then use a Letter of Undertaking (LUT) to make that qualifying export without paying IGST upfront.

Applicable period: FY 2026–27
Last reviewed: 20 September 2026

1. First check whether GST registration applies#

GST looks at aggregate turnover, not only your AdSense receipts.

Under section 2(6) of the CGST Act, aggregate turnover includes taxable supplies, exempt supplies, exports and inter-State supplies of persons having the same PAN, calculated on an all-India basis. GST and cess themselves are excluded.

For most service providers in India, the general registration threshold under section 22 is ₹20 lakh in a financial year. A lower threshold can apply in specified special-category States.

For a creator, relevant supplies may include AdSense-related services, Indian brand collaborations and other business or professional supplies under the same PAN. A qualifying export is still included in aggregate turnover even though it may be zero-rated.

Notification No. 10/2017–Integrated Tax provides an exemption from registration for persons making inter-State taxable supplies of services while their aggregate turnover remains within the applicable registration threshold. Therefore, supplying services across State borders or potentially outside India does not, by itself, require a small service provider to register from the first rupee.

Other compulsory-registration provisions may still apply depending on the facts.

2. Does your AdSense arrangement qualify as an export of services?#

Receiving money in connection with a business outside India does not automatically make the underlying service an export.

Under section 2(6) of the IGST Act, an export of services broadly requires that:

• the supplier is located in India;
• the recipient is located outside India;
• the place of supply is outside India;
• payment satisfies the prescribed foreign-exchange or permitted-INR condition; and
• the supplier and recipient are not merely establishments of the same person.

The payment condition recognises receipt in convertible foreign exchange or in Indian rupees where such receipt is permitted by the Reserve Bank of India.

For a YouTube creator, a practical starting point is to check the actual contracting entity stated in the AdSense Terms, together with the nature of the service and payment arrangement.

The contracting entity is an important fact, but it does not by itself establish who the GST recipient is or whether the supply qualifies as an export. The statutory export-of-services test must still be applied to the actual transaction.

The place of supply also matters. Where the general rule in section 13(2) of the IGST Act applies, the place of supply is the location of the recipient. Specific place-of-supply rules can apply to particular services, so the nature of the actual supply must still be considered.

Where all the applicable export conditions are satisfied, the export of services is a zero-rated supply under section 16 of the IGST Act.

3. What exactly is an LUT?#

LUT means Letter of Undertaking.

Suppose you are already registered under GST and your AdSense-related service qualifies as an export.

GST law provides a route under which a registered exporter can make a qualifying zero-rated supply without paying IGST upfront. The LUT is the undertaking used for this route.

The easiest way to remember it is:

Export status comes first. LUT comes second.

If you are not registered under GST, you do not file an LUT merely because you receive AdSense income. An LUT also cannot turn a non-qualifying transaction into an export.

Under Rule 96A of the CGST Rules, a registered person choosing to export without payment of IGST furnishes a bond or LUT in Form GST RFD-11 before export.

For eligible exporters, the LUT can be furnished electronically. CBIC Circular No. 40/14/2018-GST clarifies that the LUT is deemed accepted once the online acknowledgement bearing the Application Reference Number (ARN) is generated. Physical submission is ordinarily not required for acceptance.

The LUT is furnished for a financial year. A fresh LUT is ordinarily required for the next financial year if the exporter continues to use this route.

4. What happens after the LUT is filed?#

Filing an LUT is not the end of GST compliance.

A registered creator making a qualifying export should issue an appropriate export invoice. Rule 46 of the CGST Rules requires the prescribed endorsement where an export is made under bond or LUT without payment of integrated tax.

Export invoices are reported in Table 6A of GSTR-1, while zero-rated outward taxable supplies are reflected in the relevant portion of GSTR-3B.

Payment realisation is also important.

Rule 96A(1)(b), as amended with effect from 10 July 2024, looks to the later of:

• 15 days after the expiry of one year from the date of the export invoice; or
• the period allowed under the Foreign Exchange Management Act, 1999, including any extension permitted by the Reserve Bank of India.

The Commissioner may allow a further period.

If the required payment remains unrealised beyond the applicable period, Rule 96A requires the exporter to pay the tax due together with applicable interest under section 50, subject to any further period allowed by the Commissioner.

For a creator, the practical point is to ensure that the export invoice, AdSense payment statement and bank or permitted remittance evidence reconcile.

5. Example: AdSense plus an Indian sponsorship#

Consider Arun, a Chennai-based creator.

During FY 2026–27, he has ₹18.5 lakh of supplies under an AdSense arrangement that satisfies the export-of-services conditions. He also provides ₹3 lakh of sponsorship services to an Indian company.

His aggregate turnover is:

₹18.5 lakh + ₹3 lakh = ₹21.5 lakh

Arun cannot exclude the ₹18.5 lakh merely because those supplies qualify as exports. Exports are included while calculating aggregate turnover.

Since his aggregate turnover exceeds ₹20 lakh, the GST registration provisions become relevant from the point at which he becomes liable. Subject to the applicable provisions, the application for registration is generally required within 30 days from that date.

After registration, if the AdSense-related supplies continue to satisfy the export-of-services conditions, Arun can use the LUT route, subject to eligibility and compliance, to make those qualifying exports without paying IGST upfront.

The ₹3 lakh Indian sponsorship is a separate domestic supply and its GST treatment should be considered independently.

6. What records should a creator keep?#

A creator using the export/LUT route should ordinarily retain:

• the applicable AdSense agreement or Terms and records relevant to identifying the parties and transaction;
• export invoices and AdSense payment statements;
• bank or other permitted remittance evidence;
• the LUT acknowledgement and ARN; and
• reconciliation with the GST returns.

A common mistake is to assume that “zero-rated” means “outside GST.”

It does not. Zero-rating is a GST treatment available to qualifying supplies, including exports. Once a person is registered, the applicable invoicing, return-reporting, documentation and payment-realisation requirements continue to matter.

7. Key takeaway#

For an Indian creator, think of the process in this order:

Aggregate turnover → GST registration → Export-of-services test → LUT → Invoice and returns → Payment evidence

You do not file an LUT merely because you receive AdSense money.

First determine whether GST registration applies. Then check whether the particular service satisfies the statutory conditions for an export of services.

If it does, an eligible GST-registered exporter can use the LUT mechanism to make that qualifying export without paying IGST upfront, subject to the applicable conditions.

An LUT does not make your transaction an export. It is the mechanism used to make an already qualifying export without payment of IGST upfront.