24 July 2019
Dear Tax and Audit Experts, we are rendering "Information Technology Consultancy and Software Services" to our onsite clients. Some times we are deputing our staff to the clients site in overseas. Sometimes we are doing service for upcountry clients from our office in India. Have we to get IEC from DGFT for providing such a service. Please clarify We are preparing only Commercial Invoices with 0% GST. We are not preparing Shipping Bill as "any data copied in electronic devises or printed in papers/ books related to our service" is not passing any sea port or air port. Kindly provide statutory requirements.
With Thanks & Regards, Ramaswamy.T
Read more at: https://www.caclubindia.com/experts/gst-return-requirments-for-export-of-service-2751959.asp
24 July 2019
Thank you Ms.Anita Bhadra for your kind reply. I know as there is no physical movement of any material or data by air, sea or courier & postage IEC is not necessary. I am a little bit confused when Shipping Bill Details etc are asked for in GST Portal Return filing Dash Board.Kindly clarify my another separate query: For Export of Service 0% GST. We are billing in foreign currency and accounting for the equal Indian Currency based on FX rates.What are the information we have to provide in GST Return GSTR-1 Column 6A? Have we to provide any Tax RC numbers of foreign clients? Kindly guide me in this matter. With Thanks, Ramaswamy.T
25 July 2024
For providing "Information Technology Consultancy and Software Services" to clients located overseas, including onsite deputation of staff and remote services from India, here are the statutory requirements and clarifications regarding IEC (Import Export Code) from DGFT (Directorate General of Foreign Trade) and GST compliance:
### Import Export Code (IEC) Requirement:
1. **IEC for Service Exports**: - Generally, IEC is required for businesses exporting goods. For service exports, IEC is not mandatory unless specified otherwise by specific regulations or for certain categories of services. However, for practical purposes and to ensure compliance, many service providers choose to obtain IEC.
2. **No Physical Movement of Goods or Data**: - Since your service does not involve physical movement of goods or data through sea ports, airports, or courier services, the requirement for IEC may not apply strictly for GST purposes related to export of services.
### GST Compliance for Export of Services:
1. **GST Treatment**: - Export of services is considered as a zero-rated supply under GST. This means you can either export services with payment of IGST (Integrated Goods and Services Tax) and claim refund, or export services under a bond/LUT (Letter of Undertaking) without payment of IGST.
2. **GST Return Filing - GSTR-1 (Column 6A)**: - Column 6A of GSTR-1 pertains to details of export of services with payment of IGST. - Since your services are provided to clients outside India and are billed in foreign currency, you need to report these exports in GSTR-1. - Provide details such as invoice numbers, invoice date, client details (including name and address), and total invoice value in foreign currency. - Conversion of foreign currency into Indian Rupees should be based on the exchange rate prevalent on the date of invoice.
3. **Tax Registration Numbers of Foreign Clients**: - You are not required to provide Tax Registration Numbers (TRNs) of foreign clients in your GSTR-1 return. The details required are related to your invoices and the export transaction itself.
### Steps to Follow:
- **Obtain IEC**: Consider obtaining IEC to facilitate smoother transactions and to comply with any future regulatory requirements that may arise. - **GST Compliance**: Ensure you correctly report your export of services in GSTR-1 under Column 6A with all necessary details as outlined above. - **Maintain Documentation**: Keep proper records of invoices, foreign exchange rates used for conversion, and any other relevant documentation for audit and compliance purposes.
### Conclusion:
While IEC may not be mandatory for service exports, it is advisable to obtain it for smoother operations and compliance readiness. For GST compliance, accurately report your exports of services in GSTR-1 without the need to provide TRNs of foreign clients. Ensure you maintain proper documentation and adhere to GST regulations applicable to export of services.
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