Gst reverse charge applicable or not if

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2017 Dear sir

Please advise whether gst under reverse charge applicable or not as service provider is from outside india??

Amit Goel

Amit Goel (Expert)
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18 July 2017 if service provider is not in India and the service fall under IMPORT of service then as per section 5(3) of IGST ACT read with Notification 10/2017 of IGST entry no 1 there is reverse charge liability on recipient of service.
Section 2(11) of IGST Act

‘‘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;

Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2017 Dear sir,

In our case, Service provider is providing space for advertising or providing space for site in web..can you please advise now??

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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27 July 2024 ### **GST Reverse Charge Mechanism for Services from Outside India**

When dealing with services provided by a service provider from outside India, the Reverse Charge Mechanism (RCM) may apply depending on the type of service.

#### **1. **Applicability of GST Reverse Charge on Services from Outside India:**

- **Reverse Charge Mechanism (RCM) for Import of Services:**
- **Yes, RCM is applicable** for services provided by a service provider located outside India. The recipient of such services in India is required to pay GST under RCM.

#### **2. **Specific Cases:**

- **Advertising Services:**
- **Yes, RCM applies** if the service provider (e.g., for advertising space or any other advertising service) is located outside India. This is classified as "import of service" under GST, and the recipient (Indian business) is required to pay GST on a reverse charge basis.

- **Web Hosting Services:**
- **Yes, RCM applies** to services such as space for websites or web hosting services provided by a non-resident service provider. These services fall under the category of "import of service," and the recipient in India must pay GST under reverse charge.

#### **3. **How Reverse Charge Mechanism Works for Import of Services:**

- **Recipient’s Liability:**
- The recipient in India is responsible for paying GST on the services imported. The applicable GST rate is usually 18% unless specified otherwise.

- **Filing Requirements:**
- The recipient must declare the tax liability under RCM in their GST returns. It needs to be reported in GSTR-3B and GSTR-1, where the recipient needs to pay the applicable GST and claim input tax credit (ITC) if eligible.

- **Input Tax Credit (ITC):**
- GST paid under RCM can generally be claimed as ITC by the recipient, subject to conditions specified in GST law.

#### **4. **Documentation:**

- **Proof of Payment:**
- Maintain proof of payment of GST under RCM.

- **Invoice Details:**
- Ensure proper documentation and invoices from the service provider, even if they are from outside India.

- **GST Return Filing:**
- Report the import of services and the GST paid under RCM in your GST returns.

### **Summary**

- **GST Reverse Charge Applicability:** Yes, RCM applies for services provided by non-residents (outside India) for advertising space or web hosting services.
- **GST Rate:** Generally, 18% GST is applicable under RCM for such services.
- **Compliance:** Ensure proper reporting in GST returns and maintain all necessary documentation.

For precise compliance, always consult a GST practitioner or tax advisor, especially when dealing with cross-border transactions.