services PayPal India to Charge GST on PayPal Fees

[anantj]

PayPal will be levying the Goods and Services Tax (GST) starting from tomorrow to any individual, merchant or entity in India, regardless whether it is a business or individual account. However, it needs to be pointed out that the GST of 18% will be levied only on the PayPal fee, not the purchase amount, the company said in its FAQs.


https://www.medianama.com/2017/10/223-paypal-gst/

My thoughts:
This is only going to make domaining more expensive and cumbersome. Talking about GST, to get a refund on GST that you must charge to your sellers, the seller needs something known as FIRC. Both Paypal and Payoneer charge to issue a FIRC which means additional costs.

Domainers from India might want to factor these costs in their pricing if required.

@Brandon Abbey I love Payoneer and recommend it all the time. But charging for FIRC is not good for us domainers. Can you elaborate on the rationale for issuing a simple compliance document that allows Domainers from India to seek the input tax refund under the GST?

 

[Primary Names]

Hey @anantj, Thanks for sharing the news. One more additional cost to factor in, while pricing our domains.

 

[saj110]

@anantj Thanks for sharing this update

 

[Brandon Abbey]

PayPal will be levying the Goods and Services Tax (GST) starting from tomorrow to any individual, merchant or entity in India, regardless whether it is a business or individual account. However, it needs to be pointed out that the GST of 18% will be levied only on the PayPal fee, not the purchase amount, the company said in its FAQs.


https://www.medianama.com/2017/10/223-paypal-gst/

My thoughts:
This is only going to make domaining more expensive and cumbersome. Talking about GST, to get a refund on GST that you must charge to your sellers, the seller needs something known as FIRC. Both Paypal and Payoneer charge to issue a FIRC which means additional costs.

Domainers from India might want to factor these costs in their pricing if required.

@Brandon Abbey I love Payoneer and recommend it all the time. But charging for FIRC is not good for us domainers. Can you elaborate on the rationale for issuing a simple compliance document that allows Domainers from India to seek the input tax refund under the GST?

The FIRC is something I am not familiar with. Need to get back to you on this. Thanks,

Brandon

 

[Haroon Basha]

Paypal should come out with clear message how much they are going to charge, I mean what is the percentage.

 

[Nikhil Jain]

Paypal should come out with clear message how much they are going to charge, I mean what is the percentage.

I think it's already official. They will be charging 18% on the fees only.

 

[carbic bento]

it should be grater worry for indian paypal users. already paypal charges more than others.

 

[IMEZI]

if you only take domainers.... but in other side paypal as company also need to earn profit, how bout rethink how if there is no paypal at all and all of us will be stuck in another e-currency LOL

 

[anantj]

if you only take domainers.... but in other side paypal as company also need to earn profit, how bout rethink how if there is no paypal at all and all of us will be stuck in another e-currency LOL

I disagree. Paypal already has some of the highest fees & a very high currency conversion charge (~4-5%). Adding this on top of the exhorbitant charges that PP already has is an additional burden on Domainers

 

[IMEZI]

I disagree. Paypal already has some of the highest fees & a very high currency conversion charge (~4-5%). Adding this on top of the exhorbitant charges that PP already has is an additional burden on Domainers

dont use Paypal then, use any other ecurrency :D you always had your freedom to choose

 

[Hemanttilotia]

It's easy. 18% on fees ain't that big an amount .

 

[anantj]

dont use Paypal then, use any other ecurrency :D you always had your freedom to choose

Sure. Thank you for your insightful advice.

 

[DNBro]

While comparing Godaddy India charges 18% on transaction amount, paypal 18% on transaction fee it is a minor thing.

 

[Brandon Abbey]

PayPal will be levying the Goods and Services Tax (GST) starting from tomorrow to any individual, merchant or entity in India, regardless whether it is a business or individual account. However, it needs to be pointed out that the GST of 18% will be levied only on the PayPal fee, not the purchase amount, the company said in its FAQs.


https://www.medianama.com/2017/10/223-paypal-gst/

My thoughts:
This is only going to make domaining more expensive and cumbersome. Talking about GST, to get a refund on GST that you must charge to your sellers, the seller needs something known as FIRC. Both Paypal and Payoneer charge to issue a FIRC which means additional costs.

Domainers from India might want to factor these costs in their pricing if required.

@Brandon Abbey I love Payoneer and recommend it all the time. But charging for FIRC is not good for us domainers. Can you elaborate on the rationale for issuing a simple compliance document that allows Domainers from India to seek the input tax refund under the GST?

Here is some information regarding FIRC that I received from one of my counterparts in India. I should have additional information in the future.

FIRC – (the name is irrelevant as FIRC has been scrapped and currently it is a NOC / advise / statement that our banks issue). This is an informative letter from our intermediary bank to the benefiter’s bank – where he has a INR checking account. The letter has inputs about the remitter’s details, FX value, conversion rate and INR value etc. Since the credits are in INR this letter is a proof that the money came in from outside of India in FX. This letter allows an exporter to claim government funded drawbacks and subsidies for export. The seller has to produce more documents than just this letter. Our responsibility is restricted to getting him this letter seamlessly. This letter is required for every transaction.

 

[anantj]

Here is some information regarding FIRC that I received from one of my counterparts in India. I should have additional information in the future.

FIRC – (the name is irrelevant as FIRC has been scrapped and currently it is a NOC / advise / statement that our banks issue). This is an informative letter from our intermediary bank to the benefiter’s bank – where he has a INR checking account. The letter has inputs about the remitter’s details, FX value, conversion rate and INR value etc. Since the credits are in INR this letter is a proof that the money came in from outside of India in FX. This letter allows an exporter to claim government funded drawbacks and subsidies for export. The seller has to produce more documents than just this letter. Our responsibility is restricted to getting him this letter seamlessly. This letter is required for every transaction.

Thank you for the explanation. My question still remains - Why charge for the FIRC? And since this document is required for every transaction with a foreign party, it effectively is an additional tax on each transaction.

 

[anantj]

While comparing Godaddy India charges 18% on transaction amount, paypal 18% on transaction fee it is a minor thing.

You don't get it. You need to pay the 18% GST on the domain sale (even if it is via PP), Pay PP fees (4.8% + 2-4% currency conversion cost), pay 18% GST on the PP fees AND further, pay INR 100/200 to PP to obtain a FIRC. The first component (18% GST in the previous statement) is charged by GD but for direct sales with funds received via PP, you will have to pay the GST yourself. Can't get away from it

 

[sdom]

Thank you for the explanation. My question still remains - Why charge for the FIRC? And since this document is required for every transaction with a foreign party, it effectively is an additional tax on each transaction.

Citibank charges 100 INR for providing FIRC for a single paypal transaction. You are right. It should be provided without any cost. Hope payoneer stops charging.

 

[Brandon Abbey]

Thank you for the explanation. My question still remains - Why charge for the FIRC? And since this document is required for every transaction with a foreign party, it effectively is an additional tax on each transaction.

I am expecting additional information from our India team and will post when it comes in, thanks.