Hi, Im starting an online subscription service for India and International. The subscription is for software licence for 1 year. The product aggregates profiles for recruiters in the media and entertainment industry What GST is applicable on India payment? How can this be reduced from the 18% How is exactly is GST not applicable to foreign payments?
what are the TAX exemptions(IT,GST,etc) a startup can apply for? company will look to start revenue post 6 months from launch. Around March 2021.
GST registration is mandatory when turnover crosses 20 lakhs. International subscriptions will be covered under export of services and GST rate will be zero. LUT is required to be submitted on GST portal for the same
On sales in India GST will be applicable at 18%.
Once you obtain GST registration return filing and depositing GST is mandatory no matter what the turnover is.
Answer for GST rate for Subscription:
The software licence can be treated as Goods or Service, if you are selling the same in CD or PEN drive, then it will be Goods and if you only issuing a licence for use of the software, then it will fall under service.
Assuming that you are providing Service, then the GST rate applicable will be 18%,
you can reduce the tax amount, by availing Input tax credit.
Regarding foreign payment, it may be treated as export of service for which you can go for LUT/Bond and no need of paying the GST, if you don't go for LUT or Bond, then you have to pay GST @18% and claim refund once you get the money in foreign exchange
Hi,
GST will be applicable on India sales @18%. It cannot be reduced.
Foreign sales, if satisfies export of services rules, are specifically covered under zero rated services and therefore there is no gst on those. However, you need to take gst registration the moment your turnover (India + Foreign) exceeds inr 20 lacs.
You can take IT exemptions available to start-ups only if your start-up is eligible start-up. For that your idea should be unique and you need to apply for the exemption.
We can handhold you in the entire process if tax and related compliances.
There are no specific exemptions under gst gor start-ups
Hi
GST registration is required once your turnover cross 20 lakh. Here turnover will include both sale in India as well as sell outside India .
Rate of GST for sale/ services in India is 18 % which is fixed you can't reduce the same.
For services outside India it will be treated as export of services.
Export of goods or services is treated as a zero-rated supply. An exporter dealing in zero-rated supplies can make exports with or without payment of tax. The exporter may supply goods or services or both after paying the amount of IGST and can claim a refund of the amount of tax paid on such goods or services or both. The exporter may supply goods or services or both under bond or Letter of Undertaking without payment of integrated tax and then claim a refund of the unutilized input tax credit.
Hello,
GST would be applicable at 18% for Indian supplies.
For supplies to foreign, if considered as export supplies, would be considered as zero-rated supplies and can be supplied without payment of GST under LUT.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Under Income Tax, the exemption would be available u/s. 80IAC if your startup qualifies the eligibility criteria for startup recognition.
Dear Sir,
Hope you are doing well !!
GST@18% would be applicable on Indian sales.
You would be required to get GST registration after crossing the limit of RS 20 lakh.
As per the provisions contained under IGST law, export of goods or services or both are to be regarded as “zero-rated supplies” and a person being a registered taxable person exporting such goods or services or both shall be allowed to claim the refund of the GST paid under one of the following two options:
There are no specific exemption available for the same.
We may assist you in tax/GST calculations & GST related compliances.
It is advisable to take a phone consultation for detailed discussion.
Software license would be covered under OIDAR and hence GST on same shall be applicable at 18%.
In case of international transactions if you receive amount in foreign exchange and if the person is outside India in that case it shall be considered as export of service and hence by LUT you can claim it as exempt under GST.
The rate of GST cannot be reduced.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
You can try and apply in startup India where you might be eligible for 3 years of exemption from paying tax on profit.
Hi
You can try for that please have a phone consultation for detail discussion.
Dear Sir,
Gst @ 18% will be levied for providing software services in india without any alternative being available.
In case of export of services, one needs to get compulsorily registered under gst if turnover exceeds threshold and accordingly gst applies. However if turnover does not exceed threshold then no need for registration and hence no gst applicability.
Tax exemptions are allowed to Eligible Startups under Startup India Program. The Startup incorporated after April 1, 2016, is eligible for getting 100% tax rebate on profit for a period of three years in a block of seven years provided that annual turnover does not exceed Rs 25 crores in any financial year.
Thanks & Regards
Shiv Kumar Agarwal
