GST invoicing for India?

I’m recommending fly to some small and medium businesses located in India thanks to the new MAA deployment region. One issue that’s come up is the lack of Goods & Services Tax (GST) invoicing.

At some point in 2017, India’s tax code was updated to charge GST on foreign service providers, to provide a level playing field with Indian service providers who have to collect taxes from customers. Since Fly is not an Indian entity, GST has to be paid by the consuming Indian business entity.

GST invoicing in India will require Fly to register under GST in India and accept GST numbers from customers. This would come with the advantage that Fly can claim input tax credits for services received by it from Indian entities.

I know this is a very long shot, but I thought I’d post about in anyway.

Might not be necessary, but the government will crack down a bit. Stripe Tax Stripe Tax might add support soon, if Fly is already on Stripe.

Can do a local presence by registering in India (will have to hire an auditor here) or can handle billing the way JetBrains does - use a local agency to handle billing as a reseller. I could resell if you want at low volumes - but at higher volumes will probably have better luck with the pros.

I think you have a credit system in billing already, and with India you might just want to shift that to pay-as-you go / prepaid pricing, where people pay to buy credits and those credits run out over time. See for an example. We have rules coming up that prevent storing credit cards, so card on file is a bit up in the air.

But again, might not be necessary. Heroku doesn’t do it, and I’m a long-time Heroku customer, but my auditor does mutter under his breath every time I send him the Heroku bill.

This is a good note. I do not know when we’ll have this solved for everyone. We generally build support for things like this when a large customer who needs it.

GST registration is not necessary to have Indian customers. I’m not saying Fly has to do it. I’m simply stating that it makes Fly more attractive to Indian businesses, but as Kurt pointed out this is something that will be driven by demand.

The current situation with Fly being a foreign service provider in India means that the tax burden for an Indian entity using Fly will fall on that entity itself, just like your Heroku situation.

It’s more complicated than that apparently but GST registration means businesses can supposedly business better. None of this is financial advice.

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My own understanding is that this is not an issue. No GST is payable if a vendor is not registered for GST.

If Fly ever decided to set up an Indian entity, it would need to register for GST beyond some revenue threshold. At that point GST is mandatory on all invoices. Until then, Fly invoices can be expensed as normal and should not make Fly less or more attractive to a business.

New hour, new inputs from our accountant:

We pay GST on overseas invoices under what’s called the Reverse Charge Mechanism. Trying to confirm if we can offset these payments on invoices we raise.

Yeah, I’m paying GST on my Heroku invoices via reverse charge and then taking credit, but it’s more effort on the accountant’s side and causes cashflow problems if the amounts are large. Same issues with Fly or any other overseas vendor.

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