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How can you handle Indian taxes and payments with Fermion?

This article details how Indian GST is applied to product sales on the Fermion Platform. It also covers how Fermion is supporting creators, and some more frequently asked questions around GST.

Overview

GST (Goods and Services Tax) is a tax that must be paid to the government authorities whenever you make a sale on Fermion. If you have a GST number, you would be required to clear those taxes and this document highlights how Fermion can help you with it.

Note: This article is only for content creators with Indian origin. If you’re a content creator outside India, please refer to your country tax laws.

Fermion Payment Cycle

Fermion supports multiple payment gateways. Payment gateways are managed by Fermion and could use a mix of payment gateways to support payments from India and outside India.

Whenever your sales reach a threshold amount, fermion can dispatch a payout to your bank account.

C

This is what a demo scenario would look like:

  1. Your unpaid gross sale amount crosses ₹1,00,000.
  2. You request a payout from Fermion.
  3. Fermion would have agreed with a certain percentage commission with you. Let’s say that number is 10% for this example.
  4. If you have a GSTIN, fermion will deduct its commission on the amount excluding GST. For example, if you did ₹1,00,000 only from India, inclusive of GST, our 10% commission would be 10% of ₹84,740. ₹15,260 is GST, and you have to pay the Indian government for the sales.
  5. If you do not have a GSTIN, fermion will deduct its commission on the full amount since you will not be paying GST.
  6. Fermion deducts a 10% fee + applicable taxes. Fermion also deducts additional payment gateway charges as applicable.
  7. Fermion sends the rest of the amount to your bank account directly.

Paying your GST

Note: If you have a GST number, you must pay GST on your sales. Otherwise, this section is not applicable to you.

As you can see, Fermion acts as a payment collector in the following case. We do not file GST on the amount earned through your sales. Once you receive your amount of ₹88,000, here’s what you have to do:

  1. Download the sales payout breakdown from your Fermion dashboard. This includes detailed information about every individual payment you received including the origin of purchase.
  2. Calculate the amount you have to pay GST for.
  3. File your GST accordingly.

Let’s extend the above example we talked about.

  1. Let’s assume 50% of your sales happened from outside India. Therefore, out of ₹88,000/- sent to you by Fermion, ₹44,000/- is the amount you earned from outside India sales, and ₹44,000/- is the amount you earned from Indian sales.
  2. Therefore, you have to pay 18% GST only on the ₹44,000/- amount received, corresponding to ₹7,920. Hence, your net payout after GST comes out to be ₹88,000 – ₹7,920 = ₹80,080

Note that this ₹7,920 is indeed a GST tax input you get that you can redeem with your other business expenses.