Understanding GST Handling for Indian Registered Businesses Using Our Paid Subscription

For our Indian registered business customers, we understand the importance of proper invoicing and GST compliance. Here, we aim to clarify how GST is managed in the context of our subscription services, especially when the transaction is facilitated by our third-party payment processor, Paddle.

Adding GST Details

While subscribing to our paid subscription, you can add your GST number and business details during the checkout process. This ensures that your invoice includes all the necessary information about your registered business.

Invoicing and GST

It is important to note that although your invoice will reflect your business details and GST number, it will not include a separate GST amount. This is because the transaction is handled by Paddle, a third-party payment processor based in the United States. As Paddle is not based in India, they do not collect GST from customers.

Reverse Charge Mechanism

In this scenario, the reverse charge mechanism applies. The reverse charge mechanism is a tax scheme where the recipient of the goods or services, rather than the supplier, is responsible for paying the GST. Here’s what this means for you:

• Liability to Pay GST: As the recipient of our services, you are liable to pay the GST directly to the Indian tax authorities.
• Invoice Details: The invoice you receive will have all your business details, but it will not show GST as a separate line item since Paddle cannot collect this tax.

Compliance

To ensure compliance, please consult with your tax advisor on how to account for GST under the reverse charge mechanism. Typically, you will need to declare and pay the GST directly to the government and can usually claim it back as input tax credit in your GST returns.

We hope this clarifies the process of GST handling for our services. Should you have any further questions, please do not hesitate to contact help@paddle.com or click here for support.