GST on Software Supply: India, Singapore & USA Transactions

This query is : Resolved

Quick Summary

This discussion explores the Goods and Services Tax (GST) applicability when an Indian company purchases software from a Singaporean company, with the software being shipped directly to a US company. The core question is whether the Indian company is liable to pay GST under the Reverse Charge Mechanism (RCM). The consensus suggests RCM is not applicable as there's no import into India. The applicability might hinge on whether the transaction is considered intermediary services, which depends on the contractual agreements and the role of the Indian company.

Sharan KB

Sharan KB (Querist)

18 October 2021 Dear Sir/Madam,

In the given transaction three parties are involved and case goes like this;

Indian company purchases software from Singapore company and Indian company directs the Singapore company to ship to USA Company. i.e Bill to India and Ship to USA.

In the above case whether GST is applicable? i.e is Indian Company liable to pay GST under RCM ?

Please give your valuable opinion on it.

Thank you in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 October 2021 GST RCM not applicable in this case as no imports happen in to india.

Sharan KB

Sharan KB (Querist)

18 October 2021 Sir can you please give section as quote, as per me I though we fall under intermediary service as per 13(8)(b) of IGST Act.
Please correct me if I a m wrong

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 October 2021 As you purchase the software, you will not fall under intermediary.

CA Altamush Zafar

CA Altamush Zafar (Expert)

19 October 2021 If you are purchasing the goods then these are called high sea sales and they are out of scope of GST.
If you are functioning as a facilitator then depends whether you are intermediary or not. If intermediary then GST will be applicable.
So it depends how you draft your agreements.

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