Topics In Demand
Notification
New

No notification found.

Blog
Import of services from a supplier with no establishment in India

September 6, 2017

GST

431

0

In this blog, we look at a query on taxability of import of services where the supplier has no establishment in India.

 

Query:

An STPI unit exports BPO /Software services with clients in Germany, Austria & Italy & receives in Euro (convertible forex). To facilitate after sales service, we have an entity in Germany that works on our instructions, whom we pay almost every month, in Euro. This Entity has NO ESTABLISHMENT in India. Is GST applicable? How much?

 

Response:

An import of service shall be liable to tax on reverse charge basis, payable by the recipient of the service being located in India.

For a service to qualify as an import of service, it must satisfy the following 3 conditions cumulatively:

(i ) the supplier of service is located outside India;

(ii) the recipient of service is located in India;
(iii) the place of supply of service is in India;

In the instant case, the place of supply would be the location of the recipient (i.e., location of the STPI unit in India), in terms of Section 13(2) of the IGST Act.

Therefore, regardless of the fact that the German entity (providing the facilitation services to the STPI unit in India) does not have an establishment in India, the supply, being an import of service, would attract IGST @ 18% under the code 9985 (support services).

 

Legislative reference: Sections 7 and 13 read with Section 2(11) of the IGST Act, 2017. 

 

Authors: Meghana Belawadi and NR Badrinath

 

  

With GST set to be implemented, www.withdia.com brings to you collaborative wisdom on the GST law and potential impact areas for your business. To read more such curated content or to give us your valuable feedback head to our webpage www.withdia.com, or download our Android/iOS app on your phone and have all this knowledge accessible on the go!


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


© Copyright nasscom. All Rights Reserved.