The import of services means supply of service by a person who is located outside India to a person located in India. As per legal section supply of services imported into the territory of India shall be treated as supply of services in the course of inter-state trade or commerce and thus liable of payment of IGST. The payment on import services come with provision of reverse charge mechanism on GST on import of services.
On of the criteria for import of services it that the supplier of services should be located outside India.
Example : – XYZ Limited is a GST Registered company in India and which take professional services from ABC Limited who is located at Canada of $ 2000/- on 05/12/2018 and made payment on same day. Conversion rate is 1 $ = 65 then XYZ imported services of Rs. 130000/- hence they will be liable to pay IGST at 18%.Legal Sections : – Section 2(11) of IGST Act 2017 ”import of services” means the supply of any service, where–– i. the supplier of service is located outside India; ii. the recipient of service is located in India; and iii. the place of supply of service is in India;
As per the notification number 10/2017- Integrated Tate (Rate) 28.06.2017 the central government has notified services on which GST need to be paid on reverse charge mechanism basis. As per the notification GST on import of services shall be applicable. Services provided by any person who is located at non taxable territory to a person who is located at taxable territory , recipient is shall be covered under reverse change mechanism.Thus in case of import of services the tax is required to be paid by the recipient of such services.
The definition of “input tax” in relation to a registered person also includes the integrated tax charged on import of services.Yes company can take refund of GST paid on import of services against supply of Zero rate supplies made. Company can make an application before the expiry of two years from the relevant date in such form and manner.Legal Sections : –Section 2(62) of CGST Act 2017.“input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes–