GST on Paypal Fee in India

India is one of the 2nd largest market for the Freelancers after the US with over 15 millions people are working in this segment as per the wikipedia. Most of the freelancer are workout through some popular freelancer website or some have various outside India clients. 50%-60% freelancer payments are coming through a international payment gateway i.e is Paypal. But after the GST implementation from the july 2016 all the foreign companies have to comply with the local tax laws of the India.

Paypal pte ltd already Incorporate a Private limited Company in India i.e is Paypal Payments Private Limited with the CIN : U74990MH2009PTC194653 but they are not charging any service tax before the july 2017. The reason is simply that all the indian paypal accounts are managed by the paypal pte ltd but here is the policy update on the paypal official site i.e from 2nd oct 2017 all the indian accounts manage by the paypal payments pvt ltd which attract a GST rate of 18% on the payments.

Now freelancer have a confusion i.e these gst rates is attracted on the whole payment or on the transactions fees. Let you know that before the gst all the indian payment gateways like ccavenue or instamojo or payumoney etc are charge the service tax at the rate of 15% on the transaction fee & after the gst implementation they are charge 18% so similarly paypal indian subsidiary company charge the 18% GST on the transaction fee only not the whole amount which is received by the freelancers.

Can you take the credit of the Paypal GST as input credit ?

Yes if any freelancer are providing the services to inter state indian clients or outside both then you can apply for the GST Registration as proprietorship and take the credit of the all the gst which is paid on the paypal fee, hosting, google suite, email marketing, any subscription software fee or content writer service etc.

So Why wait apply today here on MyOnlineCA GST Registration Portal

About the author — Ankush Sachdeva is COO at MyOnlineCA which deals in MSME Registration Online across India.