In accordance with Goods and Services Tax (GST) rules and regulations in India, American online payments firm PayPal will start applying GST charges on its services with effect from November 1, 2017. PayPal seeks its users to update GSTIN details with the company at the earliest, provided the user is already registered for GST.
The online payment gateway will issue a tax invoice based on the GST registration details provided by the user. It also urges its users to update correct GSTIN to ensure that the person can claim input tax credit.
PayPal services will attract a GST rate of 18 per cent (applicable only to the Fees charged by Paypal and not the whole amount you receive or your purchase price).
Under the GST, most of the financial services attract a higher tax of 18 per cent as against earlier 15 per cent. Common banking services that attract higher tax include debit card, fund transfer, ATM withdrawal beyond the number of free services, home loan processing fee, locker rentals, issuance of cheque books/drafts/duplicate passbooks, collection of bills, collection of outstation cheques, cash handling charges and SMS alerts.