Paypal will resume bank withdrawals to India, but only for settlements for exports of goods and services, and not yet for personal payments. Earlier Paypal had blocked personal payments to and from India, and suggest that the paypal India ban may continue for a few months.
Only Export of Goods and Services Allowed
Paypal has officially announced
Moving forward, the RBI has told us that PayPal needs specific approvals to allow personal inward remittances to India, which we currently do not have. Until we get these approvals, personal payments into India will remain suspended. However, if you are an exporter, you will continue to be able to use the PayPal service for payments of goods and services.
Paypal has to comply with Reserve bank of India regulations, and it seems they have only allowed for settlements for exports of goods and services, and by Wednesday, March 3rd, Paypal will resume bank withdrawal services to India for these verified people.
Need Export Code
But all is not same now – Now you need to fill out a new field called ‘Export Code’ to process a withdrawal, to identify the nature of cross-border merchant transactions. Codeitwell says that the Importer Exporter Code or IEC is a 10 digit numeric code issued to Indian companies by DGFT – Director General of Foreign Trade, Ministry of Commerce, Government of India. Now how many bloggers who run a few common advertising programs can fill that form out and register as companies or exporters.
Pay Service Tax?
But the question is – are simple bloggers who put up a few ads to earn advertising income be called exporters of service? I just link up to the Export of Service Rules, 2005 from the official Indian Service Tax website, which might suggest some tax implications. Someone needs to read those service tax rules in detail and explain if those people who apply for the Export code, might come under the Service tax rules and need to pay service tax for their blogging income?Tags » Paypal