India : The following tax explanation applies to companies who have a registered address is in India and Exotel renders services in India.
There is tax applicable for the services provided by Exotel and we do charge it. We charge 18.00% GST (Government mandated) at the time of writing this article and may change.
Exotel is prepaid, similar to a Prepaid SIM card connection. When operators charge you for a talk time recharge, they actually also include tax in it. Whatever payment is made by you, we consider it inclusive of taxes.
Every month, we send out tax invoices for your exotel account. This is sent once a month, usually within the first week. You may claim GST input credits based on the usage in these invoices.
So, If you paid INR 118/-, INR 100/- goes as exotel credit and INR 18/- sits as GST for advance payment in our accounting software which we remit to the government in the following month. Lets say your first month bill(usage) is INR 50/-, then we add INR 9/- as GST and send you a bill for INR 59/-. You can now claim input tax credit of INR 9/-.
International (Everywhere other than India): The following tax explanation applies to companies who are registered outside India and Exotel renders services to them outside India.
Presently, export of services are zero rated so there will not be any GST charged for any international clients.
Here is a link to the official document by CBEC(Central Board of Excise and Customs) where Section 16(1) of the IGST Act, 2017 states the above.
This is how we deal with prepaid invoicing!