Hi,
Whenever we make a purchase using Paypal from our company account, paypal charges us a transaction fees for all the $ to INR conversation and their fees. But this is never given as a breakdown. What they do is they include these in the transaction.
Eg. When we make a purchase of $18.05 using Paypal, it shows a realtime conversion and all inclusive rate of Rs.1,3994.42 and we make the payment (to double check there was no other charge that was billed to us). Again in the same month when we made a purchase of $8.85 then in realtime they made an all inclusive payment of Rs. 682.26. None of these carry any GST bill as we are making payments to the overseas company through Paypal.
What happens is at the end of the month they send a total GST bill based on the transactions made for that month. For the above two transactions combined they issues a GST bill of Rs. 92.50
Some months when we transact huge amounts we get a relatively higher GST bill. We never get charged additionally though.
At the end of the bill they've written this
PayPal charges fees in the currency of the transactions. (see User Agreement). For the purpose of computation of GST, the taxable
value is determined by converting the fees to Indian rupees at the applicable accounting rate on the date of the transaction. This is in
accordance with Section 15 of the Central Goods and Service Tax (CSGT) Act 2017, and with Rule 34 of the CGST Rules, as well as
conforming with Indian accounting standards. Kindly refer to your activity report for a breakdown of your monthly fees. There may be
minor differences in the amounts in this invoice due to rounding.
For GST we only file the actual payments that we made as a reverse tax, since their company is not registered with GST. What should we do about this?