I have a client abroad who wants to initiate a contract with me to hire a freelancer based in a third country. This is a case of payroll processing, only that the freelancer in question is not in India. So there are two payments involved:
1. Client payment to me: This includes the freelancer fees I am supposed to pass on, a small fees for me for arranging this and applicable GST @ 18%
2. My payment to the freelancer abroad: His fees
I have two questions in this context:
1. In the first payment from client to my company, will GST be applicable to the entire transaction or just to my fees?
2. In the second transaction, has there been any change/clarity around reverse charge mechanism when it comes to import of services (that is the case applicable here when I hire the freelancer)
Please advise.
CAclubindia
