• GST application on selling website to a foreign company

We're a digital marketing firm doing content marketing using websites, and we're going to sell a website of ours for a sum of $7200 to a US company. The fund would be received in USD, and will have a proper FIRC to back it up. The domain was bought for a mere $10 as a usual domain and then renewed for multiple years, and over the last 4 years, we slowly developed the website by adding content to increase its value. Would this be considered an export and thus viable for 0% GST? Or would we have to pay up GST? 

Also, what would be the purpose code for receiving USD?
Asked 1 month ago in GST

It will be export of service taxable at zero rate

 

Purpose code will be IT Services

Vishrut Rajesh Shah
CA, Ahmedabad
841 Answers
34 Consultations

5.0 on 5.0

Have you shown this website as an asset in books of accounts i.e. investment or  is this  your business income?

Further, this is an intangible asset or rights that you are selling  and can be considered as sale of service under GST and could be considered as export of service and liable for zero rated supply.

 

You will need a LUT before getting the remittance.

 

The purpose code could be either P1099 or P1499.

 

Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4081 Answers
74 Consultations

5.0 on 5.0

- First of all it would be treated as capital asset. GST would not be applicable as it is an export of services. Ensure you have applied for LUT before export of services. Purpose code would be PO018. Under Income tax,  capital gain would be calculated. Pay advance tax in next installment after sale of website. 

 

For detailed discussion, you may opt for phone consultation.

Vivek Kumar Arora
CA, Delhi
4518 Answers
638 Consultations

5.0 on 5.0

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