RCM-tds reversal- foreign co.

1. How to reverse RCM in GST when imported service are cancelled ?

2. how to reverse TDS deducted under 195 - 27Q ( service relates to fy21-22, credit note issued in Dec2022). Will this also attract any penalty?

3. Branch company in India is charging interest to its head office in foreign, how to record? Do we need invoice mandatory from them,  or we can simply pass journal entry as expense for the same.

4.  Is it mandatory to receive invoice, for above TDS deduction? (ref point 3)

Replies (2)
Quick Summary
This discussion addresses several complex GST and TDS scenarios for foreign companies operating in India. It covers how to reverse Reverse Charge Mechanism (RCM) liabilities when imported services are cancelled, and how to handle TDS under Section 195-27Q when credit notes are issued later. The queries also delve into accounting for interest charged by an Indian branch to its foreign head office and the necessity of invoices for TDS deductions.

1) if the RCM liability shown in previous 3b then in current 3b take in ITC or pass self credit note of the same . Ultimately you need to reduce the liability.

My question was not that, we already have done this procedure. but in order of invoice cancellation what to do with RCM already deposited and ITC taken?

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