LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Is gst applicable for web development firm ?

28 August 2017

We have turnover of 20L+

100% payment coming from out of India.

do we need to register? I guess gst is exempted for outsourcing service provider who provides services to outside country.

I heard that we might have to invest in some bonds.

Please, someone, clear the picture.

Reply
Follow
Share

3 Replies

Shashikant Sharma (Study) (288 Points)
Replied 28 August 2017

Yes, you are required to registration. Your services is covered under zero rated supplies.

As per sec. 16 of IGST Act, Zero rated supply means any of the following supplies of goods or services or both, namely:–– (a) export of goods or services or both; or (b) supply of goods or services or both to a SEZ developer or unit.

In relation to bond :- A person making zero rated supply shall be eligible to claim refund under either of the following options, namely:––

(a) He may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the CGST Act or the rules made thereunder.

1 Like

M Agarwal (Consultant) (228 Points)
Replied 28 August 2017

It is not just about outside country related service. It is about payment in foreign currency and getting a FIRC on it. Otherwise even if it is export, govt won't consider it to be export.
So transactions from paypal, you'll need to get FIRC from citi bank, or pay 18% GST.

If bank doesn't give FIRC, no refund, pay 18% GST.

Neha sharma (-) (1257 Points)
Replied 07 September 2017

Yes, you would be required to register for GST and 18% GST is applicable in this case. However, you can claim a refund of this GST paid.

Alternatively, you can submit a LUT or Bond to the Govt and in such a scenario, you would not be required to pay any GST. The complete mechanism for the same has been mentioned on this link - https://www.charteredclub.com/gst-export-bond-lut/

Irrespective of whether you opt for Option 1 i.e. Pay GST and then claim Refund or Option 2 i.e. submit Bond/LUT, it is mandatory for you to register for GST.