GST on Import of Services
What is import of Services under GST ?
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;
Is GST applicable on Import of Services RCM ?
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.
Is GST paid under RCM on import of services credit available ?
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–
- the integrated goods and services tax charged on import of goods;
- the tax payable under the provisions of sub-sections (3) and (4) of section 9;
- the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
- the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or
- the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act,
- but does not include the tax paid under the composition levy
Is GST paid under RCM can be utilized for domestic GST payable ?
Yes. In regards to utilization of input tax credit of GST paid import of services Section 49 of CGST Act 2017
What is rate for import of services software ?
GST rate on import of software services shall be 18 % payable under IGST head.
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