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Aryan (Sr. Accountant)     22 September 2021

RCM on import service (services given to foreign to other country)

Dear Expert,

I have a question about RCM on Import Services. Our Singapore client (Sub Client) provide services to Zambia/Myanmar/Tanzania and bill is raised for invoicing these services to India. My question is we are liable to pay RCM on import services.  They have provided services to other country from Singapore and billed to India.

Please give answer with the notification.

 



 8 Replies

prasad  Nilugal

prasad Nilugal (Sr . Accountant and GST Practitioner . )     22 September 2021

               As per section 2 {6} or the IGST act 2017 , In definition of Import  of  service the supplier of  service should  be located in  India , one has to full  all the conditions in section 2{6} of the IGST  act 2017 to consider as a import  of  service . In your case  services are provided  out  side India ,I mean say non taxable territory to another  non taxable territory and bill to  India . Regarding  Goods  there is  provision in Schedule III {7}  of the  IGST  act 2017 , I am doubt  regarding  service provision .

             Considering  the above you should go for  Advance ruling under  section 97{e} of the CGST act 2017 . 

             

Aryan

Aryan (Sr. Accountant)     22 September 2021

Can anyone give a clear answer about my query ?

Rajkumar Patel

Rajkumar Patel   22 September 2021

It is considered as bill to ship to services model. it is counted as importation of services for client in india. indian client has to pay GST under RCM. In addition to it, Indian client would have to also issue an invoice to client in zambia, myanmar etc. It can also be considered as export of services and Taxability on export of services according section 16 of IGST Act
1 Like
prasad Nilugal

prasad Nilugal   22 September 2021

@ Rajkumar patel
For Import of service , Location of supplier should be in India as per definition of 2(6) of IGST act , in this case it's Singapore , so in my opinion it's not importation of service .
Rajkumar Patel

Rajkumar Patel   22 September 2021

Indian client will have to follow this process for indian recipient and Singapore client no need to follow any compliance.
1 Like
Lalitha y

Lalitha y   22 September 2021

As per definition of import of service in igst act, a service to be an import of service, the location of the supplier should be outside India, location of recipient should be in India and place of supply is India.

In your transaction it seems like place of supply is not India. if it's true, it is not import of services.
Mujeeb Doi

Mujeeb Doi   23 September 2021

Hello Mr. Aryan. Can you please elaborate as to ahwt do you mean by "sub-client". Also. confirm as to my understanding below is correct or not ?
By sentence "bill is raised for invoicing these services to India", you mean Singapore entity issue invoice to India. And then, India issues invoices to the actual recipients located in Zambia/Myanmar/Tanzania.
Aryan

Aryan (Sr. Accountant)     23 September 2021

Dear Mujeeb Doi, 

Yes.


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