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inoactiv
Community Member

FIRC certificate from Upwork

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%

ACCEPTED SOLUTION

~Andrea
Upwork

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124 REPLIES 124
deaninfotech
Community Member

I got a notification in 2020 (for Service Tax) asking to provide the FIRCs for the earnings made in FY 2015-16. At that time, elance was active until Oct 2015 and elance used Western Union to transfer in INR.

 

I tried everything - wrote to my HDFC bank, wrote to upwork and wrote to Western Union => They said check with Convera (new company who apparently took over that business from Western Union). I wrote to Convera as well. Fortunately, I got reply from all of them but everyone said one thing - We can't help you!!! FIRCs are not available because transactions were paid in INR to India.

 

I provided all the communication and the invoices to the GST department. Still, yesterday I got another notice asking to pay about 14.5% Service Tax + Equal Amount of Penalty + Applicable Interest (from 2016 till date) on the "export" income I showed in my Service Tax Return. So, just because I withdrew the amount in INR (and fundamentally I didn't do any cheating or fraud), I now have to pay a huge sum of tax, penalty etc.

 

@upwork - If you are unable to help us in providing FIRCs (because money was withdrawn in INR), why don't you stop giving us an option to withdraw locally?? I can see lot of posts from community members on this topic, but still there is no action being taken from your end. As per Indian GST laws, if the payments are not received in foreign convertible currency, then those payments cannot be considered against export services and we as agencies/freelancers have to pay applicable taxes to the government in lieu of the same. So, before more agencies/freelancers become victim of this, why don't you remove the option to withdraw locally? Trust me there is a huge monetary penatly and a massive mental harrasment in such cases. I am sure my fellow members will agree to it.

joydeep85
Community Member

This LFT is really a dangerous option and its like playing with fire . Hard earned money unknowingly is taken away from us as upwork doesn't provide FIRC . I have also opened a ticket for the same . And I am waiting on it . Else huge sum of money needs to be paid inspite we are providing export service NOT in India . Also , by laws we haven't cheated because we have never been provided with FIRC copies .

kaustubhags
Community Member

Why don't Upwork setup a registered office in India to sort out this mess with FEMA requirements? More than half of it's business is happening in India and therefore there is a permanent establishment here in India because the source of income for most freelancers is here in India itself as the money gets deposited in their bank accounts present in India. When that being the case Upwork is only trying to get away with tax obligations on their part with Government of India by using all means to evade the taxation compliances required by them when processing fees transferred in India. Even if Upwork is not providing services but is rather a platform, all the workers that provide services through Upwork to so many clients are only using the platform for payment purposes. The tools of the trade are only supplementary in nature to assist Upwork ensure that work being done by workers. Indirectly Upwork is only trying to evade or circumvent laws of India. When money is deposited in India it's clear that Upwork has a permanent establishment here in India for the purpose of payments made here in India from USA. Hence under this pretext Upwork is liable to pay taxes here in India. 

jaitlykritika
Community Member

Hi Angad,

 

Have you find any solution for the FIRC certificate?

punee995
Community Member

Wow, This thread is going for more than 5-years and upwork still failed or ignored to resolve it.

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