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GST for freelancers/agencies in India

Ace Contributor
Shubham K Member Since: Aug 18, 2017
81 of 120

Hello Ranbeer,


I'm trying to put answers to your queries, hope you will find this helpful:


1. Reverse Charge Mechanism has yet not been made applicable completely except in the case of domestic transport industry. So no point in paying it on reverse charge basis. You can not pay GST on import of services. TDS is a grey space here as there is no clear notification for services by freelancer based outside of India. My opinion is that ,TDS would not be applicable as per the section 195 of Income Tax Act read with DTAA.


2. You don't need to deduct TDS on Upwork as they are a foreign entity and does not have a office in India. Relevant case law to back this standing is DCIT (International Taxation) Vs. Hydrosult Inc.


Please drop me a message if you want to discuss this in further details. Hope my response was helpful. Thanks!

Active Member
Ranbeer M Member Since: Nov 19, 2017
82 of 120

Thanks, this is helpful.

Active Member
Marzook T Member Since: Sep 1, 2020
83 of 120
Hi Shubham,

Let me clarify one thing, i am new to the freelancing and the taxes. I have no idea about gst or returns.

How do I get started on gst?
Is it compulsory to register for gst?
Ace Contributor
Shubham K Member Since: Aug 18, 2017
84 of 120

Though it is not mandatory to register right away. Upwork does not have an
Indian Entity, so freelancers are required to be self compliant. The best
approach is to register for GST and apply for a letter of undertaking
(LUT). This will ensure that you don't have to pay any GST on your
international assignments. You must ensure that you receive an FIRC from
your bank. This proves that you have actually exported your services. Hope
this helps.
Active Member
Balbir B Member Since: Sep 26, 2017
85 of 120

Hi Shubham,  If I am an Agency on Upwork, and I spend 5000 USD every month from the same account that I receive money from foreign clients, what are the GST norms.  I don't pay GST on services, however, do I need to pay for the import of services from Upwork.

Ace Contributor
Shubham K Member Since: Aug 18, 2017
86 of 120

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.

Active Member
Dipika A Member Since: Aug 20, 2018
87 of 120
Hi Shubham, is reverse charge under GST not applicable on Upwork service fee?
Active Member
Amaneet B Member Since: Apr 17, 2019
88 of 120

Hello Shubham ,




We were raising invoice on Net Amount to be received from Upwork after deducting their service fees and membership fees.
Example : Gross Amount $ 1000, Service Fees, $ 80, Membership Fees $ 20 then invoice amount $1000 - $ 80 - $ 20 = $ 900
Now, from 1st October, 2020 Upwork has started deducting TDS ($ 7.5) from Gross Amount ($ 1000). And Gross Amount ($ 1000) will be reported in our Form 26AS. Now, we have to raise invoice for Gross Amount ($ 1000). 
Now, do we need to show Service Fees ($ 80) and Membership Fees ($ 20) as import and pay IGST ($ 18) on reverse charge or is there any other way.


Please share your inputs ,




Active Member
Pinal Z Member Since: Sep 29, 2018
89 of 120

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. 

Active Member
Mayurakshi K Member Since: Mar 6, 2021
90 of 120

Hi can you please confirm in case of only zero rated service export can ITC claimed on devices like iPads & computers?