Good Exempt if Supply to Nepal

Notification No. 42/2017- Integrated tax(Rate) dated 27th October, 2017 made the amendment in the Notification No. 9/2017- Integrated Tax (Rate), dated the 28th June, 2017 whereby a new entry have been inserted in the exemption notification, namely, Supply of services having place of supply in Nepal or Bhutan, against payment in Indian Rupees.

Though this great relief was provided to the service providers to these two countries by way of exemption from GST, a missing point is related to availment of Input Tax Credit (ITC). If such services are exempted then ITC cannot be claimed.

Recommendations made by the GST Council in the 23rd meeting at Guwahati on 10th November, 2017 

Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.