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FIRC certificate from Upwork

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Ace Contributor
Angad S Member Since: Jun 24, 2015
1 of 96

Do anyone has any idea how to get an FIRC  Certificate(Foreign Inward Remittance Certificate) from earning of upwork.

As per GST LAW which is applicable from 1st July.  There is a 18% charge on any payments received as INR.

LFT payments are first converted from USD to INR and then it is transfered via bank to Indian bank. 

But when u receive payments in INR then it does'nt qualify for GST 18% tax relief.  Only the bank which does the converstion can provide this document. So local bank cannot provide since they received converted money only.

If we are able to get FIRC certificate then it can be proved that money was earned in foreign currency and it stands for tax relief.

Does anyone has any solution how freelancers from India can save there money from GST 18%

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Moderator
Vladimir G Moderator Member Since: Oct 31, 2014
2 of 96

Hi Angad,

 

I understanding the importance and can confirm that the only certificate we can provide is the Certificate of Earnings (available under Reports), which clearly states that the funds earned are in USD.

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Ace Contributor
Angad S Member Since: Jun 24, 2015
3 of 96

Thanks Vladimir G for your suggestion. However, as I see Certificate of Earnings May not work in this case.

Since FIRC Certificate is always prepared by the bank who does the money conversion. And Government requires FIRC document as valid proof of the same.


As I have researched on the Internet, Paypal has already setup a page which they have guided local banks who receives the NEFT via Paypal to get in touch with Citi Bank which is the intermediary bank who transfers money from PayPal to India.

https://www.paypal.com/in/webapps/mpp/firc-certificate

Now in Upwork case my suggestion is they can also setup such a page where they first provide which bank is transferring and converting Payments from Upwork to India.

So we can request our bank to get in touch with that Intermediary bank used for conversion so the FIRC document can be received. This is the only solution I see to atleast get the document.

Because there is no mentioning of any bank used by upwork for transfer also even if we get may not be able to contact them. Only the local bank may contact them that is the only possibility.

This is really important since the New Norms of GST Tax is going to create issue for freelancers in India to Provide Proof of Export Services and get 18% relief of Tax.

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Moderator
Vladimir G Moderator Member Since: Oct 31, 2014
4 of 96

Hi Angad,

 

Thank you for providing the additional information and the background, I'll follow up with our team and share more information soon.

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Ace Contributor
Angad S Member Since: Jun 24, 2015
5 of 96

Hi Vladimir,

Were you able to discuss about this matter with you team. Any update for us?

Regards,
Angad

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Moderator
Avery O Moderator Member Since: Nov 23, 2015
6 of 96

Hi Angad, 


As per the advise of the team, the FIRC needs to be provided by the bank to the customer, in this case, you, when the customer receives payments in foreign currencies. If the customer received it in INR< the bank does not need to provide a FIRC. 


-Avery
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Ace Contributor
Angad S Member Since: Jun 24, 2015
7 of 96

Hi Avery,

Thanks for your reply.

I did get your point the bank needs to provide FIRC if the money received is in Foreign Exchange. To receive that we can do Wiretransfer via upwork. But fees is $30 per transfer which is very costly.

However LFT cost only $0.99. And I discussed with my local bank and they provided me information that UPWORK is sending money via Standard Chartered Bank to India incase of LFT.  Money is received in Mumbai Branch of Standard Chartered and then it is Fwded futhur via NEFT to the account holders bank.

So finally Can we get information if Upwork is sending Dollars to Standard Chartered Bank In india incase of LFT also?

If this is the case then money landed in India is Foreign Exchange and it will be exempt from any GST tax. Then we dont have to use Wiretransfer and pay any extra fees and keep using LFT.

Futhur If needed I can ask my bank to connect with Standard Chartered Bank and they can send the FIRC to my bank and Issue will be resolved.


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Moderator
Valeria K Moderator Member Since: Mar 6, 2014
8 of 96

Andag,

 

Direct to Local Bank payments to India are converted to INR prior to leaving Upwork's bank. All funds are send to our partner bank in INR currency so FIRC form should not be required.

~ Valeria
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Ace Contributor
Angad S Member Since: Jun 24, 2015
9 of 96

Thanks for clarification Valeria. 

 

If as you said upwork bank is sending INR via LFT to India then there is no point of FIRC. And this also means the payment is subject to GST 18% tax as It has landed India in Indian currency and not foreign currency.

This is going to be a problem for us since now we need to use Wiretransfer method and pay $30 for each transfer to receive foreign currency and save 18% tax.

Or we hold money in Upwork account and withdraw money maybe monthly depending upon how much you are earning weekly.

Is there any other cheaper method or solution available for us to receive foreign currency without paying so much charges?


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Moderator
Vladimir G Moderator Member Since: Oct 31, 2014
10 of 96

Hi Angad,

 

I'm sorry about the charges related to receiving funds in your country. Please feel free to review other available withdrawal methods and select the one that works best for you.

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