• Rcm before oct 18

The company operates in India and receives projects through Upwork.com. Upwork charges a 10% fee on the company's earnings, effectively reducing their net income. Until October 2018, the company's chartered accountant (CA) showed the net income of $90 (after deducting Upwork's fee) and did not apply RCM (Reverse Charge Mechanism).

However, after October 2018, Upwork started deducting TDS (Tax Deducted at Source) on the gross earnings of $100 and deposited the TDS to the Indian government. The CA responded by showing $90 as income and $10 as expenses, effectively paying RCM on the $10 deducted by Upwork.

Now, the GST officer is claiming that the company should have applied RCM on the gross earnings of $100 even before October 2018. They are also imposing penalties for the non-payment of RCM. The CA is currently examining the situation.

The CA said this is the change that has caused us to changed accounting system.

https://tax2win.in/guide/section-194o-of-the-income-tax-act

And on other note all our income is from upwork only we do not have business outside upwork.All are transactions are online only through banking channel. We deal with client outside India. 

I would request for any ones help / suggestion to get us our of this situation.

Thanks in advance.