Liquidated damage, debit note in foreign trade

Foreign supplier raises debit note towards liquidated damage for delayed supply and commissioning at Indian site,,outside letter of credit.

As Indian importer, what compliance obligation to discharge besides GST liability etc.

Please guide

Jayanta Bandyopadhyay

Howrah

26.8.21

21

Replies (3)
Quick Summary
A foreign supplier has issued a debit note for liquidated damages due to delayed supply and commissioning at an Indian site, outside of the letter of credit. The discussion seeks guidance on the compliance obligations for the Indian importer, beyond standard GST liabilities. It is suggested that this could be treated as the import of services, potentially attracting GST under the Reverse Charge Mechanism (RCM) at 18%.

I think so it is account as importation services and you will have pay gst on such services under RCM.
RCM is applicable

RCM for import of service will be applicable @ 18%

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