Fiverr Community Forum

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

Hi, Rajat , when you have submitted the exempt option… how you got to know that 1% TDS is deducted ( I mean when the order is completed you got less 1% from your usual earning of the Order transaction or When you have withdrawn the money it has deducted 1% TDS ) please do reply me anyone who submitted… I will be very grateful to you… Thanks

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Hello Indian Fiverr sellers,
Let me clear out all of your doubts here.
First of all, every E-commerce operators (here Fiverr) have to deduct TCS/TDS from
sellers earnings under Section 194-O (applicable from 1st Oct 2020) which Fiverr will pay to Indian Govt. directly and the same will reflect in seller Form 26AS if PAN number is given to Fiverr.

Now about the options on Fiverr.
Choose the option accordingly:

Taxable: If Earning>5L and you have GSTIN.

Export: If 5L<Earning<20L and you don’t have GSTIN.

Reverse Charge: If Earning<5L and you have GSTIN.
Attach FORM-13(Tax Deduction cerificate for nil TCS) from Section 197
of the Income Tax Act.

Exempt: If Earning<5L and you don’t have GSTIN.
Attach FORM-13(Tax Deduction cerificate for nil TCS) from Section 197
of the Income Tax Act.

FORM-13 under Section 197 of Income Tax Act takes you out of the TCS if your Earning<5L.

Hope it has clarified all of your doubts.

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Have you received any payments in your bank after you chose exempt? I think they will ask you for the certificate at some point

There is nothing to do with receiving payment, this deduction will be carried out right after the buyer placing an order. And yeah I receive payments as usual and Fiverr takes 1% TDS for Section 194-O since I provided the PAN (Deduction takes place when the buyer place the order only not after that and also you can see that in Earnings tabs too).

Hi Aisha,

Yes after submitted the exempt option 1% TDS is deducted. This deduction is cut after the order submission and show in earning page as “194-O”

Hi but as per my knowledge GST is not applicable on foreign clients or services that are exported outside india so everyone working on fiverr is exporting service and this is “zero rated supply of goods” under GST section,thats why my CA confirmed,i discussed with 3 different CA persons,may be i am wrong.

Please refer to this! A lot of people seem to be confusing TCS and TDS! You DO NOT need exemption certificate for TCS. For TDS, you only need it if earning more than 5 LPA.

Earning>20L , and you have GSTIN. GST will be deducted and you can’t claim the refund of it?

I think there is no GST if export is selected and earning is above 20L,check this info from fiverr.Untitled

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

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.

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!

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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.

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).

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

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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.

2 Likes

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

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…

Thanks a lot for your reply

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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.

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!