@Anant L wrote:
Hi Amardeep I have a firm of tax consultancy, all Indians on upwork has to compulsorily get themselves registered under GST once you even do a freelance of $1.
For GST you dont have to register any separate business. Every individual doing business and profession is carrying on a proprietorship with same PAN card. So under Trade Name / Legal Name muse your own full name, that's the business name aswell.
I'll suggest you to consider contacting a Practitioner near you for registration. You may take help from family and friends who have registered.
For freelancers carrying on Export of Services, government has mandated to pay 18% GST on all the billing by 20th of the succeeding month. And claim refunds after 7days of GST Return. Too cumbersome.
To bypass that legislation, exporters with Turnover less than 1Cr (INR) have to submit a Running bond in prescribed format with 15% Bank Guarantee along with other docs. this will allow export of services without payment of GST.
The running bond proccess is hardship of one time but better than regular timely payments and refunds.
What do you mean by "billing"? The taxable income does not include those which do not arrive at our bank accounts. FOREX rule accepts the fact that direct to local bank transaction fees, and Upwork service fees are not within the scope of the taxable income.
As for refunds, it is most likely for freelancers who are earning higher than 1000 rupees (and this roughly equivalent to $16.00) to benefit from it. International tourists who do export their services through the platform while staying in India are refunded automatically but the same threshold amount seem to be in place.
I gather that for refunds to be processed, a freelancer need to submit the following documents:
a) Application in prescribed Form –R. 2
b) Copy of TR-6/ GAR-7/PLA/ copy of return evidencing payment of duty
c) Copy of invoices (in original) -- two copies for services and three copies for goods (software, for instance)
d) Documents evidencing that duty has not been passed on to the buyer
e) Any other document in support of the refund claim
It looks like a freelancer has to foresee the need to include taxes in their hourly rate so as not to pass onto the client the burden of paying for taxes. This, in, fact, is the reason why the net income that is received by the respective bank of a freelancer has to be the taxable income.
Furthermore, it looks like the whole affair establishes that refund applications are better treated by the electronic filing of GST.
Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India. (2017). Refund/Rebate Claims of Customs, Central Excise & Service Tax. Retrieved August 20, 2017, from http://www.cbec.gov.in/.
Clear Tax. (2017). Refund Process UNder GST. Retrieved August 20, 2017, from https://cleartax.in/.