Nov 20, 2023 08:54:47 PM Edited Nov 21, 2023 06:50:11 AM by Shrey S
Burning question whether GST registration is required or not
I have stated in many of my post and answer to members queries that a person is mandatorily to get registered within 30 days when aggregate turnover exceeds Rs.20 lakh (Rs.10 Lakh for Manipur, Mizoram, Nagaland, and Tripura).
This was till I did not had conversation with Upwork tax team.
What does aggregate turnover means?
Aggregate turnover means
Of persons having same PAN but does not include
CGST, SGST, IGST, UTGST.
I am pretty sure no one had understood the above definition.
In simple layman terms we can calculate aggregate turnover by aggregating banking receipts and cash receipts including interest (for limited purpose we include interest just to calculate turnover but GST is not leviable on such interest).
However, when I had discussion with Upwork tax team I came to know about their status and as per conversation they are non-resident OIDAR service provider located in non-taxable territory.
In case of OIDAR services provided by a person located in non-taxable territory, place of supply is location of recipient of services and as per above provisions Upwork would be a person located in non-taxable territory provided OIDAR services and location of recipient (freelancer) is in India. It would amount to import of services and any amount paid for import of services (in case of Upwork service fee) would attract tax to be paid under reverse charge mechanism. For paying tax under reverse charge compulsory GST registration is required irrespective of turnover (even if less than Rs.20 lakh and Rs.10 lakh in case of specified states).
Now what is reverse charge?
Reverse charge means a charge other than normal charge
Now what is normal charge
Under normal charge, seller collect GST and pays to government and claim input tax credit (in layman terms rebate of tax paid to government). Reverse charge, is opposite of normal charge, in which buyer pays tax and claims input tax credit.
What if GST registration is not taken?
Penalty for non-compliance is Rs.20000 or tax evaded whichever is higher.
Secondly, I have seen that many freelancers are not furnishing income tax returns I would request to freelancers to furnish ITRs and claim TDS refund if no tax liability or adjust it against tax liability otherwise government may send notice in future.
I hope that I have solved query. I request to group member to post the query in the group so that all the queries shall be solved here itself
Nov 21, 2023 12:46:31 PM by Ali M
Dec 17, 2023 07:16:56 AM Edited Dec 17, 2023 07:17:57 AM by Sachin G
Thanks for your detailed note on this topic.
How to find out the INR amount to be paid under GST reverse charge? Currently I was already asking Upwork support everytime for USDINR rates when reporting outward-supplies. Do I need to ask UpWork support for inward-supplies RCM usdinr exchange rates also? Or this information available somewhere online? I am guessing the amount I fill will need to be exactly same as what UpWork reports to GST. Also, the USD INR exchange rates for inward and outward supplies will be different.
I had previously asked this question for outward supplies (and you had thankfully replied earlier also): https://community.upwork.com/t5/Freelancers/What-INR-amount-to-fill-when-filing-India-tax-returns-fo...
Now its the same problem for inward supplies too. I was hoping this information will get auto-filled in my GSTR2B based on what UpWork reports in their GST, but it is not showing up there: https://community.upwork.com/t5/Freelancers/India-GST-UpWork-invoices-not-showing-up-in-GSTR2B-RCM/t...
All this would be much easier if UpWork can add the INR values in Transactions report - currently it only shows USD values.
Any help and guidance will be very useful. Thanks again.