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GST for freelancers/agencies in India

kochubei_valeria
Community Member

Upwork is now collecting General Service Tax (GST) Identification Numbers for freelancers and agencies located in India. We are not currently implementing any tax collection. The GST rules in India are complex, and Upwork is currently working to determine how the GST rules apply to all Indian freelancer and agency transactions being facilitated through Upwork’s platform. At this time, we are only collecting GST ID Numbers. 

 

We have sent an email to freelancers and agencies located in India notifying them of this update. If you have a GST ID number, we ask you to click the link provided in the email to update your taxpayer identification information. Or you can input the information by going to your “User Settings” and then “Tax Information.” Once you input your taxpayer identification number, this system will confirm that we have received your number.  The system will also let you respond to indicate that you do not have a GST ID number if you are not registered.

 

If you have any questions about GST or Tax IDs, we recommend that you consult a tax advisor to determine how the law applies in your specific case.

140 Comments
e58c8405
Community Member

Hello Balbir,

 

The provisions for a reverse charge in case of import of services have loopholes and many service receivers use these loopholes to take benefit of GST. I would not be able to explain it here. However, under reverse charge, you need to pay the liability.

keyur2020
Community Member

Hi , I am registered under Indian GST and have GSTIN.

As we know from 1st Oct,2020 Upwork charging TDS on Gross amount client pays.

Also we are paying service fees in USD and get separate invoice from transaction history section , do we need to pay GST on Service fees and membership fees paid by us to Upwork?

 

Before TDS , accounting was done as net off from what client pays and what we pay to upwork.

Example:

Before 1st Oct,2020 if client pays $100 , Upwork deduct $20 and we book revenue of $80.

 

Now after 1st Oct 2020 , Upwork charges TDS on Gross amount which is $100 that means , Indian Govt will get the reporting of income from Upwork as Mr. X was paid $100 and for that , TDS was charged $0.75.

 

Based on what upwork will show to Indian Govt as our turnover would be $100 coz they have deducted TDS on that. If we net off the charges paid on upwork then our turn over would be $80 which will be a mismatch in records. So if we show $100 as our turnover and shows $20 paid to upwork as Fees , it should be considered as import of services and will be liable to pay 18% GST on the same.

 

This is my understanding. Can you anyone please help if this accounting is correct or not?

 

Thanks 

lokeshyadav2909
Community Member
Rightly said, I think upwork should charge the TCS after deducting into
account their 20% fees. So, if a contract is for $100, reduce the upwork
fees first, and then deduct the TCS from freelancers.
anupshinde17
Community Member

Can somebody from Upwork legal answer this?

Based on Keyur's case:

Not sure how we can show $20 as an expense . The money never came in our account and Upwork is not a bank. If we claim these as expenses, it cannot be legally proven. Upwork's transaction history and invoice will not stand legal. (I know PayPal's reports don't). This is forcing freelancers to over-report their income.

 

Freelancers - Has anybody verfied TDS deducted by Upwork in 26AS?

kochubei_valeria
Community Member

Keyur and Anup,

 

I encourage you to refer to my reply here. Thank you!

icomettech
Community Member

Hi Subrat!

 

I am also in same setuation and unable to find any kinds of help.

 

I would like to request you please share your findings and experience of the Softex, also

How do you submit Softex of the invoices?

What deficulties have you faced?

Is the issue resolved from the Tax Department after providing the softex certificates?

 

I am willing to use wire transfer option for future transactions and the Bank officer is expecting the Softex certificates for each invoice. So it would be really helpful if you could guide us in this case.

 

Thanks in advance.

pinalzala
Community Member

Hi Shubham
I am pretty clear about GST and 20Lakh thresold, thank you so much for details answer. I have question regarding GST within Upwork fees, so lets say I got paid $800 for one transaction and Upwork charged $200, Now I'm assuming they are paying 18% of $200 (may be 12% or 18% ) as GST. so as per my example Upwork payiong $36 as GST from my charges, so can I claim back those $ when I am filling GST return ?
I have GST number and filling retruns from last 3 years. 

work_connect
Community Member
Hi Shubham, is reverse charge under GST not applicable on Upwork service fee?
work_connect
Community Member
Hi Sridhar, did you received the proper documents from. Upwork?
sridhar_orion
Community Member

Dipika,

 

I recieved an user agreement digitally signed. But the bank did not ask for any other document after I explained the complete business model.