GST RCM on Foreign ECO

Hi Jayesh,

Your understanding is mostly correct. Let me clarify the GST RCM (Reverse Charge Mechanism) treatment on services by platforms like Booking.com and Agoda:

Key points:

1. Location of supplier:
   Although Booking.com and Agoda have local offices in India, many of their services (like online booking, commission on hotel bookings) are often provided by their foreign entities or the service is considered supplied from outside India.

2. Import of Services:
   When the service provider is located outside India and the recipient is in India, it qualifies as import of servicesunder GST.

3. RCM Applicability:

   • If the supplier is located outside India and not registered under GST, the recipient in India is liable to pay GST under RCM on the value of such services.

   • Even if they have Indian registrations but the service is considered imported, the recipient may still need to pay GST under RCM unless the foreign entity has collected GST.

4. Booking.com and Agoda:

   • Typically, Booking.com and Agoda do not charge GST on their commission invoices if the invoice is raised by their foreign entity.

   • Hence, Indian recipients of such services need to pay GST on RCM basis.

5. GST registration of foreign entity:
   Having a registered office in India by itself doesn’t automatically exempt the recipient from RCM if the service is supplied from outside India and the foreign entity does not collect GST.

Summary:

So, in your case, if Booking.com or Agoda is providing services from outside India and not charging GST, you must pay GST on RCM basis.