Is RCM applicable for import of service when export service provided to foreign party

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TAX PRACTICE
25 Points Posted on 27 April 2023
As a provider of Shipping Services and to provide the same service of waterborne Transportation from Taxable Territory to Non Taxable Territory, we have availed transportation Input service from a Foreign Shipping Company, who raised bill to us in US Dollar, for consideration of their rendered Service. We avail such service for transportation of goods from Indian port to the Port outside India. Whether this service is coming under Import of Service and tax under RCM is applicable thereon or not ?.
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On 27 April 2023 at 16:13 Report
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This discussion explores whether the Reverse Charge Mechanism (RCM) applies to imported shipping services when a business provides export services to a foreign party. The core question is whether hiring a foreign shipping company to transport goods from India to another country constitutes an 'import of service' under the IGST Act, thus triggering RCM. The consensus leans towards RCM not being applicable, as the place of supply is determined by the destination of the goods, which is outside India in this scenario.

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GST Consultant
15986 Points Posted on 27 April 2023

If you are treating it as a service received by you then RCM applicable on import of such service

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On 27 April 2023 at 16:17
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GST Practitioner
55067 Points Posted on 27 April 2023
No it is not Import of Services.

As per Section 2(11) of IGST Act Import Services means
1. Supplier of Services must be Outside India,
2. Recipient of Services must be in India 3. PLACE SUPPLY MUST BE INDIA.
so to get place of supply need to refer Section 13(9) of IGST Act . which states that POS is the destination of goods. As in your case the destination of goods is outside India hence the POS is outside India, that means it does not satisfy the conditions for Import.
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On 27 April 2023 at 23:38
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TAX PRACTICE
25 Points Posted on 28 April 2023

We are hired a cargo /vessel from Singapore to deliver our customers goods from kolkata to China port, the Singapore company raised a bill to us in USD for their vessel, the prima facie in this issue, if foreign shipping company not provide me service than my act of export service could not be performed on behalf of my client. Question is such import service applicable to pay RCM on invoice of foreign company charged? Section 2(11) IGST Act implied.

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On 28 April 2023 at 10:00
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GST Advocate
15223 Points Posted on 28 April 2023

If you have availed the GTA services from outside taxable territory to provide services to non-taxable territory then RCM will be applicable on import of services from the non-taxable territory. 

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On 28 April 2023 at 15:20
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GST Practitioner
55067 Points Posted on 28 April 2023
Dear Arun :
Your Query:
Hired Shipper from Singapore to Deliver Goods from Kolkota (Indai) to China.
Reply : No Import & no RCM applicable: Reference Section 13(9) of IGST act
1 Reply
On 28 April 2023 at 16:07

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