Hello,
I own a web design company. I receive payments via PayPal from my overseas clients. PayPal is deducting the charges for the transaction and gives me GST invoice. For Example, I receive $100 they deduct amount with GST and sending me an invoice. I have GST number and connected that to my PayPal account too. My question is after deduction PayPal is sending me the rest of the amount to my bank account. Do I need to pay GST again for the payment? Since its receivable income do I need to pay 18% GST for that balance amount I received to my account?
Please do clarify my doubt. Thanks in advance
GST is chargeable on any outward supply that we make. So you need to charge GST on any amount you receive from your customers.
However, you have provided services to foreign clients and received money from them. This falls within zero rated supplies and you need not to charge GST.
Again, for exports there are 2 options:
- Pay GST and claim it as refund
- Provide LUT (Letter of Undertaking) and export without payment of GST
If you have not furnished LUT yet, you need to pay GST on service amount agreed with client. Later you can claim it as refund, but that is a long procedure.
So, first step for you should be to apply for LUT.
Now again to prove that you made an export you should receive money in foreign currency. To prove this you need to obtain FIRC (Inward Remittance Certificate) from Paypal.
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