If websites like freelancer.com are providing freelance work to Indian freelancers by Indian businesses. They are collecting payment on behalf of freelancer from the client and acting as a safety net. Do they have to pay taxes on the whole project money collected?
Let me take an example - Indian Company ABC hires Freelancer Mr X via freelancer-india.com for ₹ 100,000. 20% is their commission. Then do they have to pay service tax on 20,000 or the whole amount 100,000 ?
Freelancer Platforms: Service Tax Applies Only on Commission, Not Entire Project Amount, Per Forum Consensus A discussion on a forum addresses whether freelancer websites like freelancer.com need to pay service tax on the entire project amount collected or just on their commission. An example is given where an Indian company hires a freelancer for 100,000 with a 20% commission to the website. The consensus among the participants is that service tax is applicable only on the commission amount of 20,000, as the website acts as a pure agent for the remaining 80,000. (AI Summary)
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