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85accf98
Community Member

Indian taxation: GST, LUT and Invoice

I will be soon coming under the ambit of the GST. I have done my gst registration and also got a Letter of Undertaking (LUT) for export of services. Since all my clients are outside the country, gst is only 0%. However, my Chartered Accountant says that the invoices should reflect both GST number and LUT number for GST compliance and exemption. I have few queries for the Indian freelancers who have been filing gst returns:

1. Is there a way on upwork to add gst and lut numbers to the invoices?

2. How are you dealing with this situation?

Any suggestions are greatly appreciated   

4 REPLIES 4
sarvajain
Community Member

1. You can create your own internal invoice via excel with GST & LUT number.
2. There is no way to enter that in upwork.

 

Thanks Sarvagya for the response. A couple of followup queries:

1. You typically create your own invoice with gst and lut or there are other alternatives to comply with gst? 

2. You quote upwork invoice numbers as references in your invoice? If it's ok, can you please share a sample invoice mapping the upwork invoices.

3. Upwork generates weekly invoices. Say I have same client for all the weeks. Since it's a custom invoice, can I create one single invoice per client per month?

Hi Sunil,

 

If you have copy of blank Invoice can you share ?

 

Also wondering how do we show Upwork Commission, Expenses (connects used to apply for a job) and TDS in the invoice. Does everyone show this or show the adjusted amount for GST invoice purpose ?

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 (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 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 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

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