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Am from India and I've created an online platform(a webbased application) where ADVERTISERS can list ads(or campaigns) and PUBLISHERS can use this ads and promote them.

So when ADVERTISERS pays me, I would be giving 90% of this money to the PUBLISHERS (based on the stats like how many views, clicks, etc.). The remaining 10% would be the my profit.

Both the ADVERTISERS and PUBLISHERS would be foreign companies/individuals. So am receiving(from ADVERTISERS) the payment from outside India and am sending(to PUBLISHERS) the payment to outside India also. But the payments are received in my Indian bank account and send(abroad) from the same account also.

My questions are:

  1. Will I have to pay GST?
  2. Do I have to collect TDS when I send money to the PUBLISHERS ?

I enquired two local Chartered Accountants. And one guy is saying that, since the payment is received from outside India and payment is paid to outside India also then no need to pay GST. Only have to worry about the Income Tax. But if you are paying to Indian PUBLISHERS then have to pay the GST(IGST or CGST depending the state).

But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India).

So am confused. If what the second guy said is true, then it would be a big loss for me! Because only a small portion is my actual profit. And inorder to pay the taxes, I have to pay from my pockets!

The thing is, I can't charge extra(as tax) when I receive the money from the ADVERTISERS. They won't pay me extra. And I can't deduct any amount when I send the payment to my PUBLISHERS. Because they would become unhappy and they won't continue with my service.

Kindly throw some ideas on my desperate condition.

Thank you

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It is best to take advise from / appoint a professional CA.

Will I have to pay GST?

No GST is applicable. Exports outside of India do not have GST.

Do I have to collect TDS when I send money to the PUBLISHERS ?

No

But another guy said, I have to pay 18% tax when receiving and sending payments, apart from that I have to collect 30.9% TDS when sending payment to the PUBLISHERS(outside India).

There is only income tax applicable on profits. So whatever you get from Advertisers less of payments to publishers less of your expenses is your profit. Since you are doing this as individual, you will have to declare this as income from other sources and pay income tax as appropriate.

Note there are restrictions on sending payments outside of India plus there are exchange rate fluctuations. It is best you open an Foreign Currency Resident [or Domestic] Account. This will enable you payout someone without much issues. Else you will have to follow FEMA and LRS schemes of RBI.

  • Thank you and sorry for the delayed response. Like you said, GST doesn't seems to be applicable to the payment received from the ADVERTISERS (as it would be considered as "export service"). But when I pay our PUBLISHERS, does that become an "import service" ? Because some guys said it will be so, and thus I have to pay 18% GST plus TDS should be collected (based on the DTAA with the recipient country)! In that case it will be a loss for us. :'( – Vpp Man Dec 11 '17 at 11:39

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