Latest Paypal India Fiasco : RBI and Indian Govt. end Paypal for Indians
If you are a Paypal Indian customer, your life with Paypal is officially over thanks to the Reserve Bank of India (RBI) and the Indian Government. You would have received an email to this effect already and would have realised that the Paypal account you so cherished is now just a wormhole to bring money into your bank account. You cannot use your earnings to purchase stuff on the Internet. So you can no longer use the hard earned money from your website to purchase hosting or to pay for the domain name of the said website. Under normal Indian Tax laws, these are perfectly acceptable uses for your earned money and infact are even deducted for the purpose of calculating taxable income from your business/service. The intentions of the Government are pretty clear. They want all this forex in Indian accounts but they dont want to give any leeway to Indians who are earning this money. A sad day in cyberspace for Indians indeed.
In compliance with Indian regulations, if you are selling products and services to customers globally, please review the following important information:
• Any proceeds or earnings received into your PayPal account from the export of goods and services should be withdrawn to your bank account within 30 days.
• While making the withdrawal please make sure you select the purpose code that best fits your business.
• Any proceeds or earnings received into your PayPal account from the export of goods and services may only be withdrawn to your bank account in India. This received amount cannot be reused for making purchases.
• If you would like to make purchases on any website that accepts PayPal, you can continue to use any credit card issued by a bank in India.
If you do use an Indian credit card to pay via Paypal it would actually mean double payment of commission to Paypal , once at time of receiving the forex and next time at the time of sending it since Paypal earns a lot through forex rates.
Its not Paypal’s fault though, its obvious the Indian Government and RBI had a larger role to play in this fiasco.