Consultancy service to abroad

IGST 198 views 2 replies

Jayanta Bandyopadhyay

382 Points Joined June 2021

We are extending remote/ online project management and installation related services to foreign based clients, who had imported machinery from us. So we receive inward remittance under RBI Purpose Code P0104.

Does this service attract 18% GST, assuming this service will fall under the head of " other technical and scientific services nowhere else classified"- ref Maharashtra AAAR award recently.

Additionally, we often charge Warehouse Rental charge, where foreign clients do not import within agreed time frame. In such case, what will be tax/ Customs law implications, as we receive a good amount. What Purpose Code will be used?

Kindly guide.

Regards

Replies (2)

Aisha

Finance Professional

8749 Points Joined October 2007

Yes, the GST rate for services falling under the head "other technical and scientific services nowhere else classified" is 18%. So if your services fall under this category, as per the Maharashtra AAAR award, then 18% GST would be applicable on the service charges you receive for providing remote/online project management and installation services to foreign based clients.

As for the warehouse rental charges, if you are providing warehouse services to foreign clients, then GST would be applicable on the charges you receive for providing such services. The purpose code that would be used for such transactions would be P0104, which is for services received from abroad.

Jayanta Bandyopadhyay

382 Points Joined June 2021

Many thanks. Unfortunately, IGST on reverse charge basis is not being mentioned on Invoice. No IGST is also being paid. Any penal action possible if it does not get surfaced.

Addionally, is warehouse rental income subject to tax? We are LLP.

Regards

Jayanta