TDS & RCM applicable-services rendered overseas and payment in USD within India.

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This query is : Resolved

Quick Summary

This discussion addresses whether Tax Deducted at Source (TDS) and Reverse Charge Mechanism (RCM) apply to services provided by Indian entities for foreign projects, with payments made in USD within India. It clarifies that TDS under Section 194C is applicable, but RCM is not as it's considered an export of service. The conversation also explores scenarios where payment is made in INR and whether GST is applicable if the vendor is registered.

Aryan

Aryan (Querist)

03 September 2022 Dear Expert,

If any local persons/Indian entity provided their services for our overseas ongoing project(Foreign), they have submitted their bills in USD currency in India.
They have their own USD account in India. This means that funds will be transferred from our USD account to their USD account within India.

Query
1. TDS will be deducted on these bills ?
2. RCM applicable on these bills ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 September 2022 1 TDS applicable under section 194c.
2 RCM not applicable as it's export of service.

Aryan

Aryan (Querist)

12 September 2022 Ok thank you so much.

Aryan

Aryan (Querist)

05 January 2023 We want to know further continue this question, if payment goes in INR and party give bill in INR, then what effect on TDS and RCM. Another question, if vendor is registered person, then will GST be charged on bill or not?

The party will render its services abroad, and the bill is raised in India and the payment is also made from India in INR or USD. We want to know whether TDS and RCM is applicable on this or not?

Aryan

Aryan (Querist)