GST from exempted Indian taxpayer

[#1]

Hello, from this November Upwork started cutting GST in India (on purchase of connects, membership)

but they made a deduction on my hourly contract...

I don't need a GSTIN and they don't have to cut 18% GST

as I'm exempted from registering for GST

because I’m under the 20,00000 INR threshold,

So what should I do now?

**Edited for Community Guidelines**

[#2]

Hi Tanmay, 

Thank you for reaching out to us. India does not offer any exemptions from GST that are applicable to Upwork’s services, but you can avoid GST charges being collected by Upwork on your behalf by providing a valid GSTIN. You may want to check this help article for more information. 

[#3]

Resolved..

[#4]

Hello Tanmay,

same happens to me... They should not charge GST as I'm under 20,00,000 INR threshold. 

[#5 · Accepted solution]

Hello Nehal,

I just learned, Upwork is not actually cutting 18% GST on entire payment amount...

but the part they deduct from our payment (which is 10% Upwork service fees)

and it's still fair for us (freelancers) cmpared to their previous policy where they use to deduct 20%. 😅

so currently the total cut is -12.8%

(with 1% TDS and 1.8% GST cut on entire amount which we can get back in ITR return if we are below taxable limit of 7 lac Rs)

Ex for all:

Total amount: $400

Upwork fee: -$40 (10%)

GST: -$7.2 (18% of 10% fees)

TDS: -$4 (1%)

Amount we get: $348.8

[#6]

Hello Tanmay,

Thank you for your reply. I think you are right.  Previously we have been charged 20% as service fees. In compare to that 12.8% is less. 

Thing which I didn't know that we can return GST & TDS back in IT. 

[#7]

I'm not 100% sure about this 1.8% GST but in ITR-4 I got my entire 1% TDS refund.

[#8]

Thank you Tanmay.  👍

[#9]

Welcome 😊🙏

[#10]

How I can avoid it? GST (IN) - Service Fee deduction.
It's not deducted from the initial payment but is now deducted.
GSTIN number required even if I do not come under that category.?

[#11]

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).

What does aggregate turnover means?

Aggregate turnover means

• Taxable supplies
• Exempt Supplies
• Exports
• Inter-state supplies

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 income  (for limited purpose we include interest just to calculate turnover but GST is not leviable on such interest).

This was till I did not had conversation with Upwork tax team.

However, when I had discussion with Upwork tax team I came to know about their status and as per conversation they are 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 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 and 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 those 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 or drop a message to me or directly connect with me through Your network feature.

[#12]

---

Shrey S wrote:

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).

What does aggregate turnover means?

Aggregate turnover means

• Taxable supplies
• Exempt Supplies
• Exports
• Inter-state supplies

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 income  (for limited purpose we include interest just to calculate turnover but GST is not leviable on such interest).

This was till I did not had conversation with Upwork tax team.

However, when I had discussion with Upwork tax team I came to know about their status and as per conversation they are 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 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 and 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 those 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 or drop a message to me or directly connect with me through Your network feature.

---

So every freelancer from India (using Upwork) has to have a GSTIN and is liable for GST no matter how little the income?

[#13]

Both are two different things.

1. You require GSTIN if your income threshold is over 20 lakhs per annum. In that case you should register for GSTIN and pay the tax by yourself.

2. Upwork is now collecting GST for their services, like membership fee, connects purchase and all. And the GST they are collecting now is for their service. 

So the first scenario is you are collecting tax from your customer and the second one is you are paying for the service / goods you are buying from others, here Upwork. 

[#14]

Yes, exactly. I think the reason for this whole confusion is that it shows a -$ amount in the "Pending" section under overview for GST. that triggers a question in your mind when you see it for the very first time! Bcoz they never showed any minus red amount for Upwork fees and TDS, so why show GST in red colour? To give me heart attack, like Ohh the goverment taking my money?? 😂

[#15]

Lol 🙂

[#16]

Honestly! that minus red $ amount looks like debt 😁

[#17]

https://www.outlookindia.com/business/are-you-a-freelancer-here-are-three-things-you-should-know-abo...

This article may clear your doubts.

[#18]

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).

What does aggregate turnover means?

Aggregate turnover means

• Taxable supplies
• Exempt Supplies
• Exports
• Inter-state supplies

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 income  (for limited purpose we include interest just to calculate turnover but GST is not leviable on such interest).

This was till I did not had conversation with Upwork tax team.

However, when I had discussion with Upwork tax team I came to know about their status and as per conversation they are 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 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 and 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 those 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 or drop a message to me or directly connect with me through Your network feature.

[#19]

But, I ask from CA, He said he will charge per month 2500 INR to submit GST Return every month other penality or late fees applied. 

[#20]

Hi folks from India,

I have talked to a GST specialist and created a separate post so it doesn’t get drowned in a major thread like this one.

Please have a look at the thread below:

https://community.upwork.com/t5/Freelancers/GST-registration-for-freelancers-from-India-and-the-rece...

Best regards,

Ravindra

ETA: The problem I had referred to earlier has been resolved.

[#21]

Guys, I'm facing a peculiar scenario. We earlier had a partnership firm (GST registered), we have the GST number of that firm when Upwork was collecting GST data few years back.

We dissolved the firm by the end of March 2023, and I upwork I changed the Pan number, agency name and removed the GST number too. Even during this change we had issues like Upwork depositing the TDS to different pan and we had to fight it out to reverse those.

We then registered as sole properietership with GST. I added the new GST number on Upwork profile when they asked to update it around October 2023. Now in all invoices previous to October 2023, I see my old GST number. Upwork says they have updated the old GST number on the invoices from the previous record and cannot be changed.

The irony is even on invoices before the GST period (before september 2017) they have added this GST number on all those invoices too.

I'm not sure how I can rectify this, and Upwork support is not understanding the seriousness of the issue

[#22]

Hello, '

If we get GST number then do we need to fill GST return monthly or quatrly? CA is charging more for monthly... 

Plz guide me

[#23]

GST Exemptions for Exporter Freelancers

Exporter freelancers enjoy certain exemptions and benefits under GST:

1. Zero-rated Supplies: Exporter freelancers can supply services at zero GST rate for exports, ensuring competitiveness in the global market.
2. Input Tax Credit: They can claim input tax credit on inputs used for exports, reducing tax liabilities and enhancing profitability.

Read Full gudie arcticle for "Do Freelancers Need GST Registration in India?"

[#24]

If you need Free Consulation on GST registration in India. Please Fllow LegalShark Law Firam.

[#25]

The Goods and Services Tax (GST) registration requirement exempts specific individuals and businesses, such as agriculturists (who benefit from a complete exemption) and those with an annual turnover below the threshold.

• INR 40 lakhs for goods
• INR 20 lakhs for services (with further reductions to INR 10 lakhs for certain categories)

more check here:**Edited for Community Guidelines**