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

Aryan (Sr. Accountant) (242 Points)

22 September 2021

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.

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9 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 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 .

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Aryan (Sr. Accountant) (242 Points)
Replied 22 September 2021

Can anyone give a clear answer about my query ?

Rajkumar Patel (602 Points)
Replied 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

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prasad Nilugal (3914 Points)
Replied 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 (602 Points)
Replied 22 September 2021

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

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Lalitha y (39 Points)
Replied 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 (309 Points)
Replied 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 (Sr. Accountant) (242 Points)
Replied 23 September 2021

Dear Mujeeb Doi,

Yes.

Mahesh (Accountant) (47 Points)
Replied 15 November 2021

Can you please clarify some doubts for RCM on import of services.

1. DO we have to pay rcm on import of services like web hosting, licenses, etc.?
2. If yes than we have to raise self invoice as foreign company is not registered?
3. If foreign company is registered and have PAN No. Still we have to pay rcm by generating self invoice?
4. If under QRMP Scheme do i have to pay rcm and normal tax in 2 different chaalans. Also can i claim the ITC in the same month as it will
not refelct in GSTR 2B
5. Self invoice where we have to upload in GST Returns?
6. For Import of Services Which GST Returns we have to file under QRMP Scheme
7. How to claim ITC in self invoicing as it will not reflect in GSTR 2B under QRMP Scheme.