SUNJA LIVE - PAYMENT POLICY

Company: Sunja Labs Private Limited
Address: Ranchi, Jharkhand, India
Platform: Sunja Live
Document Version: 1.0
Effective Date: 21st August, 2025

1. PAYMENT GATEWAY INTEGRATION FRAMEWORK

1.1 Platform Revenue Model

Sunja Live operates as a digital livestreaming platform where:

Sole Service Provider: Sunja Labs Private Limited is the exclusive supplier of livestreaming services to end users
User Payment Structure: Users pay directly to the platform via two methods:
- Pay-Per-View (PPV): Nominal fees (eg. ₹20 INR, $1 USD, €1 EUR)
- Unlimited Subscription Pass: Monthly/Annual unlimited access
Creator Relationship: Creators are independent publishers with no direct payment obligation to the platform

1.2 Payment Gateway Requirements

Primary Gateways: Integration with Razorpay (India) etc, Stripe/Paddle etc (International)
PCI DSS Compliance: All payment data handled by PCI-compliant gateway partners
Data Security: Zero storage of payment credentials on platform servers
Multi-Currency Support: USD, EUR, INR with automatic currency conversion
Payment Methods: Credit cards, debit cards, UPI, digital wallets, net banking

2. GST AND TAX COMPLIANCE FRAMEWORK

2.1 Platform Tax Obligations

Sunja Labs Private Limited as Sole Supplier:

OIDAR Services GST Place of Supply Rules:

USER CLASSIFICATION FOR GST PURPOSES:

B2B (Business-to-Business) Users - GST Registered Entities:

Users who possess valid GST Registration Number (GSTIN)
Must explicitly declare business use during payment
Must provide valid GSTIN for verification
Includes: Companies, registered businesses, GST-registered freelancers
Note: Platform account registration ≠ GST registration

B2C (Business-to-Consumer) Users - Individual/Unregistered:

All users WITHOUT valid GST registration
Includes: Individual viewers, personal users, unregistered creators
This includes platform-registered users who don't have GSTIN
Subject to consumption-based place of supply rules

PAYMENT PROCESS USER TYPE DETERMINATION:

Step 1: User Declaration During Payment

Payment Purpose:

□ Personal/Individual Use (B2C)

□ Business Use - I have GST Registration (B2B)

Step 2A: Business Use Selected (B2B Path)

Enter GST Registration Number (GSTIN): \[\_\_\_\_\_\_\_\_\_\_\_\_\]

Business Name: \[\_\_\_\_\_\_\_\_\_\_\_\_\]

Business Address: \[\_\_\_\_\_\_\_\_\_\_\_\_\]

↓

Automated GSTIN Verification via GST Portal API

↓

If Valid GSTIN → Apply B2B Rules

If Invalid GSTIN → Auto-redirect to B2C Rules with notification

**Step 2B: Personal Use Selected (B2C Path)**

Apply 6-Criteria Place of Supply Test

↓

Real-time evaluation during payment processing

GST APPLICATION RULES:

For B2B Users (Valid GSTIN Provided):

Place of Supply: Location of recipient's registered business establishment (per GSTIN)
Indian Registered Business: 18% GST (regardless of consumption location)
Foreign Registered Business: 0% GST (export of service under LUT/Bond)
Compliance: Reverse Charge Mechanism may apply for registered recipients

For B2C Users (No Valid GSTIN) - 6-Criteria Consumption Test: The recipient is deemed located in India if ANY 2 OR MORE of these criteria are met:

Address Location: Address provided through internet is in India
Billing Address: Billing address of service recipient is in India
Payment Card: Credit/debit card used for payment is issued by Indian bank
IP Address: IP address of recipient's device is in India
Bank Account: Bank account used for payment is maintained in India
Identity Verification: Country code of recipient's identity card is India

GST Application Based on Criteria:

2+ Criteria Met: 18% GST (service consumed in India)
Less than 2 Criteria Met: 0% GST (export of service)
Real-Time Assessment: Automated evaluation during transaction processing

CRITICAL EXAMPLES:

B2C Scenarios (Most Common):

Platform-registered viewer from Mumbai using Indian card → 18% GST (IP + card = 2 criteria)
Foreign tourist in India using foreign card → 18% GST (IP + billing address = 2 criteria)
Indian citizen abroad using foreign payment methods → 0% GST (export)
NRI using Indian bank account from abroad → 18% GST (bank account + identity = 2 criteria)

B2B Scenarios:

Marketing agency provides valid GSTIN during payment → 18% GST (based on business location)
Foreign company with valid overseas GST equivalent → 0% GST (export)
Creator providing valid GSTIN for business expenses → B2B treatment

IMPORTANT CLARIFICATIONS:

Platform Account Registration: Creating Sunja Live account does NOT make user B2B
Creator Accounts: Creators are B2C unless they provide valid GSTIN
Subscription vs PPV: Same rules apply regardless of payment type
User Choice: Users can switch between personal/business during different transactions

GST Collection Framework:

User type determination at payment initiation
Automated place of supply determination based on user type
Real-time GST calculation with clear user notification
GST-compliant invoices with detailed classification and place of supply justification
Separate reporting for B2B vs B2C transactions in GST returns

Export Documentation (for 0% GST transactions):

Service export invoices with foreign exchange realization
LUT/Bond maintenance for zero-rated supplies
Transaction-wise export documentation with criteria evaluation records
FIRC (Foreign Inward Remittance Certificate) tracking for export payments

2.2 Creator Revenue Classification

Independent Publisher Framework:

Creator Status: Creators are classified as independent content publishers, not service providers to the platform
Revenue Share Nature: Creator payouts are platform-generated revenue distributions based on:
- Algorithmic Model: Calculations based on viewership metrics, watch time, and platform-defined algorithms, OR
- Contractual Model: Pre-agreed revenue sharing arrangements with creators or their authorized agencies/representatives
Content Expense Treatment: Creator payouts are treated as content acquisition expenses in platform accounting, not service procurement costs
Creator GST Responsibility: Creators bear independent GST liability on their earnings if applicable under GST thresholds and registration requirements

INDIAN CREATOR PAYMENT COMPLIANCE:

Tax Deducted at Source (TDS) Framework:

Section 194C Application: TDS applicable on payments to Indian creators exceeding ₹30,000 per financial year
TDS Rate: 1% for individual creators, 2% for corporate entities (as per Section 194C)
PAN Requirement: Valid PAN mandatory for all Indian creators for TDS compliance
Higher TDS: 20% TDS if creator fails to provide valid PAN
TDS Certificate: Form 16A issued to creators for TDS deducted amounts

GST Compliance for Indian Creators:

GST Registration Threshold: Creators earning above ₹20 lakhs annually (₹10 lakhs for special category states) must register for GST
Creator GST Responsibility: Platform does not collect GST on creator earnings - creators responsible for their own GST compliance
Input Tax Credit: Creators can claim ITC on platform-related business expenses if GST registered
Reverse Charge: Not applicable as creators are independent publishers, not service providers to platform

Income Tax Obligations:

Professional Income: Creator earnings classified as income from profession under Income Tax Act
Advance Tax: Creators liable to pay advance tax if annual earnings exceed ₹10,000
ITR Filing: Mandatory ITR filing for creators with annual income above basic exemption limit
Audit Requirement: Tax audit mandatory if creator's professional income exceeds ₹50 lakhs annually

Documentation and Compliance:

Form 15G/15H: Accepted for TDS exemption if creator's total income below taxable limit
Professional Registration: No mandatory professional license required for content creation
Books of Accounts: Maintenance of books recommended for creators with substantial earnings
Digital Payments: All creator payments above ₹10,000 made through digital modes only

INTERNATIONAL CREATOR PAYMENT COMPLIANCE:

Withholding Tax Framework:

Non-Resident Creators: Withholding tax applicable as per Section 195 of Income Tax Act
Standard Rate: 20% (or as per applicable DTAA rates with proper documentation)
DTAA Benefits: Reduced rates available with valid Tax Residency Certificate (TRC)
Form 15CA/15CB: Mandatory filing for payments exceeding ₹5 lakhs per financial year per creator

FEMA Compliance:

Current Account Transactions: Creator payments classified under CAT for FEMA compliance
Payment Thresholds: Individual creator payments exceeding $25,000 per year require additional documentation
RBI Reporting: Monthly and annual FEMA returns for foreign payments
Documentation: Proper service agreements and performance certificates for all international payments

3. PAYMENT PROCESSING MECHANICS

3.1 Transaction Flow

User Payment: All payments processed through integrated payment gateways
Platform Collection: 100% of user payments (including GST) collected by Sunja Labs Private Limited
Payment Gateway Fees: All processing fees absorbed by the platform
Creator Attribution: Revenue share calculated based on viewership algorithms and distributed as content expense

3.2 Creator Payout System

Revenue Share Models:

Model A - Algorithmic Distribution:

PPV Attribution: Direct percentage of nominal fees from stream viewers
Subscription Attribution: Algorithmic distribution based on:
- Subscriber watch time per creator
- Unique subscriber viewer count
- Platform-defined attribution formulas
Variable Rates: Creator-specific percentages based on content quality, audience engagement, and genre

Model B - Contractual Arrangements:

Pre-Agreed Terms: Revenue sharing based on individual contracts with creators or their authorized agencies
Fixed/Tiered Rates: Predetermined payout percentages or amounts as per signed agreements
Performance Metrics: May include minimum viewership requirements or other contractual obligations

CRITICAL PAYOUT LIMITS & CONTROLS:

Payment Thresholds:

Indian Creators: No specific limits (subject to TDS compliance)
International Creators: Maximum $25,000 per creator per financial year without enhanced compliance
High-Value Creators: Payments exceeding $25,000 require:
- Enhanced KYC documentation
- Legal agreement review
- Tax consultant approval
- Monthly compliance monitoring

Common Payout Terms:

Payout Frequency: Monthly (to ensure proper tax compliance and cash flow management)
Minimum Threshold: ₹1,000 for Indian creators, $50 for international creators
Payment Suspension: Automatic hold for compliance verification if thresholds exceeded
Model Selection: Determined at creator onboarding or contract negotiation

4. REFUND AND CANCELLATION POLICIES

4.1 Pay-Per-View (PPV) Refunds

Automatic Refunds:

Full automatic refund if scheduled stream fails to go live
Full automatic refund if stream is interrupted during broadcast
User-requested refunds accepted up to 24 hours before scheduled stream time

Processing Method:

Refunds processed through original payment method via payment gateway
Refund timeline: Up to 7 business days depending on payment method and gateway

4.2 Subscription Refunds

No Refund Policy:

Strict No-Refund Policy: No refunds (full, partial, or prorated) for subscription purchases
Rationale: Nominal fee structure with unlimited access value proposition
Cancellation: Users may cancel auto-renewal but retain access until subscription period ends
Clear Disclosure: Policy prominently displayed during purchase flow and in Terms of Service

5. PAYMENT GATEWAY COMPLIANCE REQUIREMENTS

5.1 Financial Compliance

CRITICAL ACCOUNTING TREATMENT - CREATOR PAYMENTS:

Content Expense Classification: All creator payouts treated as "Content Acquisition Expenses" NOT "Service Costs"
Platform as Sole Supplier: Sunja Live is exclusive supplier to viewers; creators are content publishers
Revenue Distribution Model: Creator payments represent algorithmic/contractual distribution of platform revenue
GST Treatment: Platform collects GST on full viewer payment; creator payouts are content costs (no input tax credit)
IndAS Compliance: Creator payments classified under "Content and Programming Costs" per broadcasting industry standards
Transfer Pricing Documentation: Content expense classification supports arm's length pricing methodology

Indian Regulatory Compliance:

GST Compliance:

GST Registration: Valid GST registration with export benefits under LUT/Bond
Place of Supply Compliance: Real-time determination system implemented
GST Rates: 18% for India consumption, 0% for export of services
Monthly Returns: GSTR-1, GSTR-3B filing with accurate place of supply reporting

Payment Gateway & RBI Compliance:

PA-CB Assessment: Evaluation of Payment Aggregator Cross Border license requirement
RBI Authorization: Only RBI-approved payment gateways utilized
FEMA Compliance: Current Account Transaction classification for creator payments
Forex Reporting: Monthly and annual FEMA returns for international transactions

International Tax Compliance:

Withholding Tax: Automated deduction for non-resident creator payments
DTAA Optimization: Tax Residency Certificate verification system
Form 15CA/15CB: Automated filing for payments exceeding ₹5 lakhs
Transfer Pricing: Documentation for international payments exceeding prescribed thresholds

AML/KYC Enhanced Framework:

Risk-Based Approach: Enhanced due diligence for high-risk jurisdictions
Sanctions Screening: Real-time screening against OFAC, UN, EU sanctions lists
Ongoing Monitoring: Continuous transaction monitoring for suspicious activities
Regulatory Reporting: Suspicious Transaction Reports (STR) and other mandatory filings

5.2 Data Protection

Security Standards:

PCI DSS Level 1: Payment gateways must maintain highest security certification
Data Localization: Indian user data stored per RBI guidelines
GDPR Compliance: European user data protection adherence
Encryption: End-to-end encryption for all payment communications

6. CREATOR PAYMENT AND TAX OBLIGATIONS

6.1 Creator Onboarding Requirements

TIER 1: INDIAN CREATORS Basic KYC Documentation:

Legal name (matching government ID and bank records)
PAN (Permanent Account Number) - MANDATORY
Bank account details (IFSC, account number, account holder name)
Address verification (Aadhaar/Voter ID/Utility bill)
Government-issued photo ID (Aadhaar/Passport/Driving License)

TIER 2: INTERNATIONAL CREATORS (Standard) Enhanced KYC Documentation:

Legal name (matching government ID and bank records)
Tax identification number (TIN/SSN/Tax ID as applicable)
Tax Residency Certificate (TRC) for DTAA benefits
Bank account details with SWIFT code for international transfers
Address verification in country of residence
Government-issued photo ID (Passport preferred)
Proof of tax residency status

TIER 3: HIGH-VALUE INTERNATIONAL CREATORS (>$25,000/year) Premium KYC Documentation:

All Tier 2 requirements PLUS:
Enhanced due diligence questionnaire
Source of income declaration
Business registration documents (if applicable)
Professional references or agency authorization
Sanctions list clearance certificate
Legal agreement review and approval

Contractual Framework:

Individual Creators: Direct platform agreement with algorithmic or negotiated rates
Agency Representation: Authorized agency agreements for creator representation with proper documentation
Revenue Model Selection: Choice between algorithmic distribution or pre-negotiated contractual terms
Performance Metrics: Defined criteria for both algorithmic and contractual payout models
Compliance Monitoring: Ongoing verification of creator status and payment thresholds

6.2 Creator Tax Responsibilities

INDIAN CREATOR TAX OBLIGATIONS:

Platform's TDS Obligations:

Automatic TDS Deduction: 10% TDS on payments exceeding ₹30,000 per financial year
Higher TDS: 20% if creator fails to provide valid PAN
TDS Exemption: Accepted via Form 15G/15H if creator's total income below taxable limit
TDS Certificate: Form 16A issued quarterly to creators
TDS Deposit: Platform deposits TDS with government by 7th of following month

Creator's Independent Tax Responsibilities:

Income Tax: Creators solely responsible for income tax on net earnings (after TDS)
Advance Tax: Quarterly advance tax payments if annual liability exceeds ₹10,000
ITR Filing: Annual income tax return filing mandatory if income above basic exemption
Professional Income: Creator earnings treated as income from profession
Tax Audit: Mandatory if professional income exceeds ₹50 lakhs annually

GST Compliance:

GST Registration: Mandatory if annual earnings exceed ₹20 lakhs (₹10 lakhs for special category states)
GST Returns: Monthly/quarterly GST return filing if registered
Input Tax Credit: Creators can claim ITC on business expenses if GST registered
Reverse Charge: Not applicable as creators are independent publishers

INTERNATIONAL CREATOR TAX OBLIGATIONS:

Platform's Withholding Tax Obligations:

Section 195 Compliance: Withholding tax deduction on all payments to non-residents
Standard Rate: 20% or as per applicable DTAA rates
DTAA Benefits: Applied with valid Tax Residency Certificate
Form 15CA/15CB: Filed for payments exceeding ₹5 lakhs per financial year
Certificate: TDS certificate issued as per Indian tax regulations

Creator's Independent Tax Responsibilities:

Local Tax Compliance: Creators solely responsible for tax obligations in their country of residence
Tax Treaty Benefits: Creators may claim relief in home country for Indian taxes paid
Documentation: Creators must maintain proper documentation for international tax compliance
Professional Advice: Recommended to engage local tax advisors for compliance

COMMON COMPLIANCE FRAMEWORK: Platform Responsibilities:

Provide annual earning statements to all creators
Issue appropriate tax certificates (Form 16A for Indians, TDS certificates for international)
Maintain detailed payment records for audit and compliance
Update creators on any changes to tax obligations

Creator Responsibilities:

Provide accurate tax identification information
Maintain books of accounts as required by local laws
File appropriate tax returns in their jurisdiction
Update platform on any changes to tax status or residency

Independent Tax Liability:

Creators solely responsible for income tax obligations on platform earnings
Platform provides annual earning statements for tax filing assistance
TDS Obligations: Platform may deduct TDS as per Indian Income Tax Act if payments exceed prescribed thresholds
Non-Resident Creators: Withholding tax applicable per international tax treaties

7. PAYMENT GATEWAY INTEGRATION SPECIFICATIONS

7.1 Technical Requirements

API Integration:

Real-time payment confirmation and failure notifications
Webhook support for payment status updates
Automated refund processing capabilities
Multi-currency transaction support with real-time conversion rates

7.2 Reporting and Reconciliation

Financial Reporting:

Daily transaction reports and settlement statements
GST-compliant transaction categorization
Creator payout tracking and audit trails
Automated reconciliation with platform revenue calculations

8. JURISDICTIONAL FRAMEWORK & LEGAL COMPLIANCE

8.1 Governing Law and Jurisdiction

Tiered Jurisdictional Approach:

Indian Creators:

Governing Law: Indian law (including Indian Contract Act, Income Tax Act, GST Act)
Jurisdiction: Courts of Ranchi, Jharkhand for dispute resolution
Arbitration: Indian Arbitration and Conciliation Act, 2015

International Creators:

Primary Governing Law: Indian law for platform-related matters
Contract Law: Creator's country of residence for employment/contractor classification
Tax Law: Respective country's tax laws for creator tax obligations
Dispute Resolution: International Commercial Arbitration (Singapore/London) for amounts exceeding $10,000

8.2 Data Protection and Privacy Compliance

Multi-Jurisdictional Data Compliance:

Indian Data Protection:

DPDP Act 2023: Full compliance with Indian data protection requirements
Data Localization: Critical personal data stored within India
Cross-Border Transfer: Proper consent and safeguards for international data transfer

International Data Compliance:

GDPR (EU): Full compliance for EU creators and users
Data Transfer Mechanisms: Standard Contractual Clauses (SCCs) for EU data transfers
Regional Laws: Compliance with local data protection laws in creator jurisdictions

8.3 Content and Liability Framework

Content Responsibility Matrix:

Platform Liability:

Safe Harbor: Compliance with IT Act 2000 intermediary provisions
Content Moderation: Proactive monitoring and takedown procedures
DMCA Compliance: Copyright infringement response framework

Creator Liability:

Content Ownership: Creators warrant ownership of all streamed content
Indemnification: Creators indemnify platform against content-related claims
Local Law Compliance: Creators ensure content compliance with their local laws

9. DISPUTE RESOLUTION AND CUSTOMER SUPPORT

9.1 Payment Disputes

Payment Transaction Disputes:

Primary Jurisdiction: Payment gateway/aggregator policies take precedence for transaction-related issues
Gateway Dispute Resolution: All payment processing disputes (failed transactions, unauthorized charges, chargeback claims) are subject to respective payment gateway's dispute resolution framework
Supported Gateways: Razorpay dispute policies (India), Stripe dispute policies (International)
Platform Role: Sunja Live acts as facilitator and provides transaction documentation to support dispute resolution
Timeline: As per payment gateway's standard resolution timelines (typically 7-45 business days)

User Payment Issues - Gateway Policy Application:

Transaction Failures: Subject to payment gateway's retry and failure policies
Refund Processing: Follows payment gateway's refund timelines and procedures
Card/Bank Disputes: Handled directly between user, bank, and payment gateway
Chargeback Claims: Governed by payment gateway's chargeback protection and response policies
Currency Conversion Issues: Subject to payment gateway's forex and conversion policies

Platform-Level Payment Support:

Account Balance Issues: Platform customer support for subscription status and access queries
Billing Inquiries: Platform provides transaction history and invoice clarification
Service Access Problems: Platform resolves content access issues post successful payment
Escalation Process: Unresolved gateway disputes escalated to platform legal team after gateway resolution attempts

9.2 Creator Payment Issues

Payout Disputes:

Creator dashboard for earnings transparency
Support ticket system for payout inquiries
Manual review process for attribution algorithm disputes
Bank transfer failure resolution procedures

10. COMPLIANCE MONITORING & RISK MANAGEMENT

10.1 Automated Compliance Systems

Real-Time Monitoring:

Transaction Monitoring: Automated flagging of transactions exceeding compliance thresholds
Creator Payment Tracking: Real-time monitoring of individual creator payment limits
Tax Calculation Engine: Automated GST and withholding tax calculation based on location/residency
Sanctions Screening: Real-time screening of all creators and users against global sanctions lists

10.2 Periodic Compliance Reviews

Monthly Reviews:

Creator payment threshold monitoring and approvals
GST place of supply accuracy verification
International payment FEMA compliance review
AML transaction pattern analysis

Quarterly Reviews:

DTAA certificate validity and renewal tracking
Transfer pricing documentation updates
Payment aggregator license compliance assessment
Data protection audit and breach assessments

Annual Reviews:

Complete tax compliance audit (GST, withholding tax, FEMA)
Creator agreement renewals and updates
Regulatory change impact assessment
Business risk and compliance cost analysis

10.3 Emergency Procedures

Compliance Breach Response:

Immediate payment suspension for non-compliant transactions
Regulatory notification procedures
Legal counsel engagement protocols
Business continuity and damage mitigation strategies

11. PAYMENT GATEWAY POLICY INTEGRATION

11.1 Payment Gateway Policy Hierarchy

Policy Precedence for Payment-Related Matters:

Payment Gateway Policies Take Precedence For:

Transaction Processing: All payment processing procedures, fees, and timelines
Dispute Resolution: Transaction failures, chargebacks, unauthorized payment claims
Refund Processing: Refund timelines, procedures, and limitations per gateway policies
Security Protocols: PCI DSS compliance, fraud detection, and transaction security measures
Currency Conversion: Forex rates, conversion fees, and international transaction handling
Payment Method Support: Accepted cards, digital wallets, and payment instrument limitations
Technical Issues: Payment gateway downtime, maintenance, and service interruptions

11.2 Platform vs Gateway Responsibility Matrix

Payment Gateway Responsibility:

Transaction authorization and processing
Payment security and fraud protection
Chargeback and dispute management
Refund execution and processing
Compliance with card network rules
Customer payment data protection

Platform (Sunja Live) Responsibility:

Service delivery post successful payment
GST calculation and compliance
Creator payout processing
Platform-specific refund policy enforcement
User account and subscription management
Content access and streaming service delivery

11.3 User Communication Framework

Payment-Related Issues:

Users directed to appropriate payment gateway support for transaction issues
Platform provides gateway contact information and reference numbers
Clear communication about which issues are handled by gateway vs platform
Escalation to platform only after gateway resolution attempts

Documentation and Support:

Platform maintains transaction logs for gateway dispute support
Users receive clear receipts indicating applicable gateway policies
Terms of Service explicitly reference applicable payment gateway policies
Customer support trained on gateway policy boundaries

12. ACCOUNTING TREATMENT AND CLASSIFICATION

12.1 Creator Payment Accounting Framework

Mandatory Accounting Classification:

Creator Payments as Content Expense:

Primary Classification: All creator payouts classified as "Content Acquisition Expenses" in platform books of accounts
NOT Service Costs: Creator payments are explicitly NOT treated as "Service Costs" or "Professional Service Expenses"
NOT Input Services: Creator payouts do NOT qualify as input services for GST input tax credit
Revenue Distribution: Payments represent distribution of platform-generated revenue, not consideration for services to platform

Platform Revenue Model Accounting:

Sole Supplier Framework: Platform is exclusive supplier of streaming services to end users
Content Licensing Model: Creators grant content usage rights; platform distributes revenue share
Independent Publisher Status: Creators operate as independent content publishers, not platform service providers
Algorithmic Distribution: Revenue sharing based on platform algorithms and performance metrics

12.2 IndAS and Accounting Standards Compliance

Revenue Recognition (IndAS 115):

Platform Revenue: 100% of user payments recognized as platform revenue
Creator Payouts: Treated as content acquisition costs against revenue
Performance Obligations: Platform's obligation is service delivery to users, not payment to creators
Contract Classification: Creator agreements are content licensing contracts, not service agreements

Expense Classification (IndAS Framework):

Content and Programming Costs: Creator payments classified under this category (similar to broadcasting industry)
Cost of Revenue: Creator payouts treated as direct cost of providing streaming services
Period Allocation: Expenses recognized in period when content is consumed by users
Fair Value: Content expense valuation based on platform algorithm and performance metrics

12.3 Tax and GST Accounting Implications

GST Input Tax Credit:

No ITC Eligibility: Platform cannot claim input tax credit on creator payments (as they are content costs, not input services)
Creator GST Independence: Any GST paid by creators on their earnings is independent of platform GST obligations
Sole Supplier Confirmation: Platform charges GST on full user payment amount without creator payment deductions

GST Framework Clarification:

Platform to Creator: NO GST charged (revenue sharing/content expense, not service transaction)
Platform to Users: 18% GST charged (platform is sole service provider)
Creator to Platform: NO GST applicable (creators don't provide services to platform)
Creator to Others: If GST registered, creators charge GST on their independent business activities

GST Input Tax Credit:

No ITC Eligibility: Platform cannot claim input tax credit on creator payments (as they are content costs, not input services)
Creator ITC: Creators can claim ITC on their business expenses (equipment, software, etc.) if GST registered
Separate GST Streams: Platform GST compliance and Creator GST compliance are completely independent
No Cross-Claims: Neither party can claim ITC on payments between platform and creators

Practical GST Example:

User pays ₹100 + ₹18 GST = ₹118 to Platform

Platform keeps ₹70, pays ₹30 to Creator (NO GST)

Platform pays ₹18 GST to government on ₹100 revenue

Creator receives ₹30 as content revenue (handles own GST obligations independently)

Platform cannot claim any ITC on ₹30 creator payment

Transfer Pricing Documentation:

Content Acquisition Pricing: Creator payment rates justified as content acquisition costs, not service rates
Arm's Length Principle: Content expense benchmarking against similar streaming platforms
International Payments: Content licensing fee structure supports FEMA and transfer pricing compliance

Income Tax Treatment:

Business Expense: Creator payments treated as legitimate business expense for income tax purposes
Deduction Eligibility: Full deduction available under Income Tax Act as content acquisition costs
Professional Services Exclusion: Payments NOT treated as professional service fees for tax purposes

13. POLICY AMENDMENTS AND UPDATES

13.1 Modification Rights

The platform reserves the right to modify this payment policy with 30 days advance notice to creators and prominent notification to users.

13.2 Regulatory Updates

Policy automatically updated to maintain compliance with evolving Indian and international payment regulations, GST amendments, and RBI guidelines.

Document Approval:

Legal Team: ________________
Finance Team: ________________
CA Certification: ________________
Management Approval: ________________

Next Review Date: [6 months from effective date]