For Indian sellers, what is the tax option that must be selected?

[crownmediaa]

Hello Crownmediaa,

Yes, if you have selected EXPORT then there will be no GST (GST on Export of services is Zero Rated only if you are getting payment from outside India)

For Indian Sellers having earning<5L they can select EXEMPT and attach the FORM-13 under section 197 of Income Tax Act.

Yes thats what i am saying,you mentioned that GST will be debited and wont be refunded,i was just confirming that GST wont be debited and unsed ITC can be transferred to bank account as well.

[rajat2910]

Thanks a lot rajat for your reply, Okay, As you said it is showing in the earnings page as {194-0} after The order is marked as complete by buyer! I have another question for example order is of $10 and fiverr takes 20% that is $2 and we get $8 that is 80%, so now as 1% TDS is deducted have you got earning of 79% that is $7.9 , Is this calculation correct? I will be very grateful if you clarify this… Thanks in advance

Yes, They are deducting 1% TDS on sale price including their cut. For 10 USD service, fiverr takes 20% (2) and plus 1% TDS ( 0.1).

[sahaamit9486]

Hello Fiverr Sellers,

Let me make it clear for all Indian Sellers about tax form.

-If Earning>5L, choose EXPORT.

-If Earning<5L, choose EXEMPT and provide FORM-13 under Section 197 of Income Tax Act.

Thank you!

How to apply FORM-13 for Exemption certificate? How to submit this Exemption certificate to Fiverr?

[salluzedits]

You can’t choose exempt option unless you have that certificate!

Why are u creating confusion for a simple thing? In case, an Indian seller’s annual income is less than Rs.20 Lakh, he/she simply has to opt-in exempt (from GST) thats it.

[venkatameghana]

Why are u creating confusion for a simple thing? In case, an Indian seller’s annual income is less than Rs.20 Lakh, he/she simply has to opt-in exempt (from GST) thats it.

Yes, thank you! Most people don’t seem to get that the exempt certificate is required for TDS and not TCS!

[salluzedits]

Refer to the GST and 194-0 Flowcharts given in this Fiverr Support link, they explain everything quite clearly:

Fiverr.com

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So, two kinds of deductions are applicable on our Fiverr earnings:

1. Section-194-0 (1% TDS): Here is where you need the “Exemption Certificate” stating that you earn less than 5L PA. If you don’t want to do that, you can update your PAN No. and claim that 1% back as refund when you file ITR next year (assuming you don’t incur any tax liability) - it should show up in your Form-26AS.

Note that if you don’t update your PAN No. and also don’t provide an exemption certificate then 5% TDS will be deducted instead of just 1%.

2. GST (1% TCS or 18% for Promoted Gigs): As others mentioned in this post, here you can select “Exempt” and “Not Registered for GST” if you earn less than 20L PA through Fiverr.

The first one (Section-194-0) has been recently introduced in Union Budget 2020 and is implemented on Upwork too.

“1. Section-194-0 (1% TDS): Here is where you need the “Exemption Certificate” stating that you earn less than 5L PA. If you don’t want to do that, you can update your PAN No. and claim that 1% back as refund when you file ITR next year (assuming you don’t incur any tax liability) - it should show up in your Form-26AS.”

I think, the above information may be applicable in respect of majority of the Indian sellers. I interpret it this way. Option 1 Best course would be to get an “Exemption Certificate” under Section-194-0, but from where, no one is able to provide the appropriate and correct information. If any one does this, this would be most helpful to many. Next is Option 2, let TDS be deducted by Fiverr and other similar marketplaces as they are doing right now, I mean 1% in respect of those who have provided a PAN and 5% in respect of those who have not provided a PAN, and claim back the total TDS at the time when you are filing your ITR in case your total annual income remains under Rs.5 Lakh. So guys here would be another scenario and let me call it Option 3 just to make the things easier to understand - What if you don’t file an ITR by the due date in the next financial year? Then its repercussion would be that ‘you are not declaring that your annual income was below Rs.5 Lakh’ and ‘you are not claiming back the TDS’. In this situation, be ready to lose the TDS deducted by these marketplaces (ether at the rate of 1% or 5% whatever the case may be). Don’t know, in case a person doesn’t file an ITR, he / she will get a notice by the revenue department of the concerned ministry. Comments are welcome…

[aishaa_designer]

Yes, They are deducting 1% TDS on sale price including their cut. For 10 USD service, fiverr takes 20% (2) and plus 1% TDS ( 0.1).

Thanks a lot for your reply

[adiraimaji]

I saw a video in youtube and select “Reverse Charge”, now it deduct 1% on each sale or let’s say I get $7.90 on $10 sale or I get 79% on each sale.

Please let me know if anyone get exemption certificate and get 0% deduction there.

I’ve seen someone said they’ve chosen exempt (With PAN) and they’ve loss 5% of their earning. I don’t know how this works. But it’s better to consult an auditor regarding this.

[aishaa_designer]

Yes, They are deducting 1% TDS on sale price including their cut. For 10 USD service, fiverr takes 20% (2) and plus 1% TDS ( 0.1).

Hi, rajat can you help me, in filling the form, I haven’t filled yet, I earn below 5LPA , I have two questions for you #1 The form has some fields which as mandatory and some are not, will it be okay if I only fill mandatory ones, such as name, state, and citizen of india, gst yes or no, and exempt option, Will it be okay if Ieave the fields blank such as company name, address, city, postal code?

#2 for gst registered (yes or no) option, which option I have to select as I earn below 5LPA,

I have also attached form images

I will be very grateful if anyone who has filled the form helps me out! Thanks in advance!

Screenshot 2021-05-16 140300497×682 23.4 KB

[salluzedits]

Hi, rajat can you help me, in filling the form, I haven’t filled yet, I earn below 5LPA , I have two questions for you #1 The form has some fields which as mandatory and some are not, will it be okay if I only fill mandatory ones, such as name, state, and citizen of india, gst yes or no, and exempt option, Will it be okay if Ieave the fields blank such as company name, address, city, postal code?

#2 for gst registered (yes or no) option, which option I have to select as I earn below 5LPA,

I have also attached form images

I will be very grateful if anyone who has filled the form helps me out! Thanks in advance!

Screenshot 2021-05-16 140300497×682 23.4 KB

This refers to aishaa_designer’s query on filling-up the Billing Informaton form of the Fiverr. aishaa_designer has mentioned that her earning is below Rs.5 Lakh per annum. So in this case, following suggestions may please be perused.

Please fill up all mandatory and other fields viz. Name, Country, State/ Union Terriroty, Address (write your home street address), City, Postal Code, Are you a citizen /resident of India? Write …Yes, Are you registered for India GST? Write …No, PAN ? Write your PAN number (If you don’t give your PAN and prefer to give Aadhaar No., Fiverr will deduct 5% TDS instead of 1% on each order, so pls make sure you give your PAN, and don’t give Aadhaar). How is your service taxed? Write …Exempt, Invoices? Tick mark the correct option, so that you get invoices of each order (this will help you when will file your ITR after closing of the financial year when you will claim back your TDS), Enter your email address? provide the one which you used for Fiverr registration. Click on submit…Your form will be submitted, and your gigs will be live thereafter. All the best.

[eternalvideopro]

@salluzedits @navya_r @crownmediaa @sahaamit9486 @creativeboymk @adiraimaji My last year’s income was more than 10L and less than 20L.

This year I didn’t make much and I am expecting less than equal to 5L. But what if my income increases and reach 10L or so at the end of the year so I am confused about which option to select in the taxed category?

Please help. Thank you

[crownmediaa]

@salluzedits @navya_r @crownmediaa @sahaamit9486 @creativeboymk @adiraimaji My last year’s income was more than 10L and less than 20L.

This year I didn’t make much and I am expecting less than equal to 5L. But what if my income increases and reach 10L or so at the end of the year so I am confused about which option to select in the taxed category?

Please help. Thank you

This is export of service,you can apply for GST if turn over is 20L + in current financial year (within 30 days of crossing 20L)

[eternalvideopro]

This is export of service,you can apply for GST if turn over is 20L + in current financial year (within 30 days of crossing 20L)

My turn over would be way less than 20L

[chiragdhanak25]

Being a CA, i have client base who work here on fiverr.com, so i have learned at the time of profile updating for taxation purpose that following point you need to consider at the time of profile updating;

1. if you have GST registration then you have two options:
   1st option = if your customer base is 100% outsider (means located outside of
   INDIA), then you should select Export
   2nd option = if your customer base is mix (means located outside INDIA and inside
   INDIA), then you should select Taxable

2. if you have no GST Registration then you have to select Exempt, as in this option also there will be 1% deduction from you payments

3. major services will not attract Reverse Charge option.

Note : PAN number should be mentioned otherwise there will be 5% deduction from your payment, which will be not refundable to you.

[eternalvideopro]

Being a CA, i have client base who work here on fiverr.com, so i have learned at the time of profile updating for taxation purpose that following point you need to consider at the time of profile updating;

1. if you have GST registration then you have two options:

   1st option = if your customer base is 100% outsider (means located outside of

   INDIA), then you should select Export

   2nd option = if your customer base is mix (means located outside INDIA and inside

   INDIA), then you should select Taxable

2. if you have no GST Registration then you have to select Exempt, as in this option also there will be 1% deduction from you payments

3. major services will not attract Reverse Charge option.

Note : PAN number should be mentioned otherwise there will be 5% deduction from your payment, which will be not refundable to you.

If I choose EXEMPT, there is a requirement of any certificate or so? Is that true? How do I get it? @chiragdhanak25

[chiragdhanak25]

If I choose EXEMPT, there is a requirement of any certificate or so? Is that true? How do I get it? @chiragdhanak25

no there is no requirement of any certificate, it means only exempted from GST, your TCS will be deducted @1% mandatory.

[chiragdhanak25]

If I choose EXEMPT, there is a requirement of any certificate or so? Is that true? How do I get it? @chiragdhanak25

and yes if you take certificate for exemption from income tax department under form 15G/H then you will get exemption from TCS deduction also, but only if your last year income is under 5 lacs and you expect this year also it will be below 5 lacs.

[eternalvideopro]

and yes if you take certificate for exemption from income tax department under form 15G/H then you will get exemption from TCS deduction also, but only if your last year income is under 5 lacs and you expect this year also it will be below 5 lacs.

I am expecting but not sure if it goes beyond 10L. Please advice by assuming my turn over by 10L @chiragdhanak25

[chiragdhanak25]

I am expecting but not sure if it goes beyond 10L. Please advice by assuming my turn over by 10L @chiragdhanak25

then Let them deduct 1% TCS on your payment, which will be refunded you in next year after filling of income return for year 2021-22.

[eternalvideopro]

then Let them deduct 1% TCS on your payment, which will be refunded you in next year after filling of income return for year 2021-22.

Thanks so much for your help.

Just out of my curiosity, I wanted to know, what if I choose EXPORT? Would that make a difference?

[eternalvideopro]

no there is no requirement of any certificate, it means only exempted from GST, your TCS will be deducted @1% mandatory.

@chiragdhanak25 Also, I am confused here because it says NO GST or TCS charges and you are saying they will deduct 1%. I am sorry for being so questionable and Thaks for your help

[chiragdhanak25]

Thanks so much for your help.

Just out of my curiosity, I wanted to know, what if I choose EXPORT? Would that make a difference?

if you choose export then you should have GST registration with LUT bond so that you will no need to charge 18%, so ultimately you will be exempted and only 1% TCS will be charged on your payment.

[chiragdhanak25]

@chiragdhanak25 Also, I am confused here because it says NO GST or TCS charges and you are saying they will deduct 1%. I am sorry for being so questionable and Thaks for your help

yes, that we have clarified with support that only if you provide them form 15G/H then only you will be exempted from TCS otherwise they will automatically charge 1% TCS even though you have selected for exempted. That because of taxability for TCS of fiverr.com due to their turnover threshold limit.

[eternalvideopro]

yes, that we have clarified with support that only if you provide them form 15G/H then only you will be exempted from TCS otherwise they will automatically charge 1% TCS even though you have selected for exempted. That because of taxability for TCS of fiverr.com due to their turnover threshold limit.

Thank you so much @chiragdhanak25

So I am going to choose EXEMPT. Thanks a lot.

Also, can you help me with one more question? This question is for the future but I am curious to know about it as well

If the income reaches 10L-18L a year, what category should we select? or Fiverr will allow to make us changes thereafter?

[vvgediya]

Thanks all for information. I will select Exempt option.