GST Implications For Digital course on Marketplace

Hi Everyone,

The below questions are from my friend, Please provide guidance :

We have been selling our digital courses on Udemy (We are based out of India). Udemy pays us every month in Dollars ( which we get through remittance (Payoneer/Paypal) in our Indian account), Udemy sells the course across the world and as per the local laws collects the taxes. It takes GST (18%) from India-based students.

My questions are:

- Do I need to register for GST? I sell the course in my individual capacity.

- Udemy withhold some tax components from our income for some of the students (US based) and pays the rest, I was under the assumption that as we are dealing with US entity we don't have to have GST number, but in 26AS we saw that there are 1% TDS for the amount which we are earning through our Indian student. So it seems like even Udemy India is involved and is deducting the tax, is my assumption correct? Doesn't it make us liable to pay GST?

- Also, we reached out to Udemy support to get the GST details which they are collecting from Indian students for our course but they just have email support, and doesn't look like they will provide the documents (Although they have provided the US-based tax docs, about withholding the tax, etc.)

So can you guide me how can I navigate through this? shall I take GST number and pay the 18% tax? ( which is effectively doubling of tax). Please advice.

Hey V J, here’s a detailed take on your friend’s digital course GST situation selling via Udemy:

1. Do you need to register for GST?

Yes, you likely need GST registration if your aggregate turnover exceeds Rs. 20 lakhs (10 lakhs in some states).
Even if selling digital courses on a marketplace like Udemy, your supply of service (digital content) to Indian customers is taxable under GST.
Since Udemy is a marketplace facilitator, they collect GST from Indian students at 18%, but you as the supplier also need to be registered if turnover crosses threshold.

2. What about GST liability & TDS on income?

Udemy collects GST from Indian students and remits it. This means Udemy acts as the ‘supplier’ or ‘agent’ for GST on marketplace sales.
Your friend receives payments (after Udemy’s cut) from Udemy as the platform operator (usually from abroad).
The 1% TDS you see on your income under section 194-O or 194Q is for marketplace sellers, where the platform deducts TDS on your commission or payment.
This TDS is different from GST, and GST is applicable on your supply to Udemy (or directly to students).
So, yes, Udemy India is involved, and you are liable for GST on your income if threshold met. The TDS does not replace GST liability.

3. Double taxation concerns?

It feels like double taxation but GST collected by Udemy is on the supply made to Indian students; your supply to Udemy or platform is also taxable.
If Udemy is treating themselves as the supplier to students and you as a service provider to Udemy, your invoice to Udemy attracts GST.
If your supply is export of services (to Udemy as a foreign entity), then you can claim export benefits and GST may be zero-rated, subject to conditions.
You can claim input tax credit for GST paid on your purchases/services to reduce your liability.

4. How to get GST details and file returns?

Since Udemy is collecting GST on sales to Indian customers, ask them for invoices or details about GST collected for audit purposes.
If Udemy refuses, maintain proper records of all sales and GST collected (from students’ invoices if any).
Register for GST if required and file GST returns.
Consult a GST expert to structure invoices correctly (especially if Udemy acts as an aggregator or principal).

Summary Advice:

Register for GST if turnover exceeds threshold.
You are liable for GST on your supply to Udemy or end customer, depending on contract.
Udemy collecting GST from Indian students does not exempt your GST liability.
1% TDS on income is a separate tax deduction and doesn’t affect GST.
Keep proper records, ask Udemy for GST invoices.
Consider export of services treatment if possible (zero-rated supplies).
Consult a tax expert for detailed contract and invoicing advice.