Project in malaysia, employed a malaysian personnel, GST implication.

Hey! Here’s the GST perspective on your Malaysia project and paying a Malaysian employee from India:

Key Points on GST Implication:

1. GST is an Indian indirect tax on supply of goods/services within India.

2. Salary payments to employees are not considered a supply of services, so salary paid to the Malaysian personnel does NOT attract GST.

3. Since the employee is working in Malaysia and the salary is paid from India in USD, this is essentially an employment contract, not a supply of service by your Indian entity.

4. GST is not applicable on salary payments — no GST on salary or wages.

5. However, if you were paying for services (like consultancy, contract services) to a foreign entity/person, then GST on import of services under Reverse Charge Mechanism (RCM) might apply.

6. But since this is a direct employment relationship and salary payment, it falls outside GST scope.

Summary: