Paypal, service tax, firc and huge confusion

3082 views 6 replies

Review

Director

41 Points Joined November 2009

PayPal converts the money from USD to INR at their end and then route the money to Citibank India which in turn sends NEFT transaction in INR to my HDFC Bank account In India.

My CA has said that only that money that comes in foreign convertible exchange which has a FIRC issued can be considered for Service Tax exemption.

HDFC Bank says that since they are getting money in INR they can't issue me FIRC certificate.

I am clearly getting money in USD from abroad in my PayPal account. I just wanted to seek exert opinion here, what is the way for me to avail the service tax exemption given that HDFC is not willing to provide me the FIRC certificate.

Replies (6)

KAPIL BANSAL

DIRECTOR

22 Points Joined November 2012

Sir

I have exactly the same question. Are we eligible for service tax exemption for export of service if we receive the payment via paypal.

Is it mandatory to submit FIRC certificates? Since both Paypal and banks are not issuing the certifictaes, what should we do in this case?

Does anyone have a foolproof answer?

Eagerly waiting for a response

Thanks

KAPIL BANSAL

DIRECTOR

22 Points Joined November 2012

I enquired Paypal for FIRC and this is the response i got -

" I understand your concern. I would like to inform you that PayPal cannot issue FIRCs or coordinate how FIRCs are issued. The FIRCs are actually issued by the authorized dealer bank . PayPal’s blog post merely mentioned the FIRCs as part of the advantages of using our revised process.

Customers with questions about FIRCs should be asked to contact their bank to initiate a request for FIRC."

The understanding tha i got from the above is that after the recent changes made by RBI and Paypal, some mechanism has been made to get FIRC.

However, i want to know if anybody got success in getting FIRC for their paypal payments? Also, what does dealer bank mean in this case? Is it the bank through which payment gets routed to my icici bank account?

Please share your knowledge

purshotam vohra

CA IPCC

138 Points Joined October 2012

Well friend i don't know much about this thing

But i also use Paypal and also received lot of money from it via Online Earning

And i have a bank account in PNB , at the same time i am just a student and don't have Pan card

But i didn't get any kind of problem regard tax filing and etc :-D

Dipjyoti Majumdar

CA in service & CS. dipmaj@

3469 Points Joined June 2011

May I request our senior members to share their thoughts on this interesting matter, please.

Regards,

Rohit Shah

Others

37 Points Joined March 2015

I am going through same situation. Is there anyone who knows about this? The OP still haven't received an answer yet I guess. I got the same question as well. Any advice?

Samraat

Business Head

41 Points Joined June 2017

Hi Guys,

I just got FIRC's issued by Citibank for 17 transactions. They charge Rs 172 per FIRC and the request will have to made by your bank to Citi.

However, the next big issue is that Citibank simply mentions the senders name as PayPal - not the actual party. My ICICI branch has been after my life to provide details of the sender - which I have but since Citi does not give on FIRC - its a dead end.

In case anyone has got a solution to this - please share. So So fed up with all the useless paperwork.

Rgds,

Samraat