Gst Applicability
This query is : Resolved
10 November 2017
If supplier of services as well as receiver of services both are in india , but services is provided outside india , wheter gst is applicable . If yes , then under which section og gst act ?
11 November 2017
Since both service provider and service receiver in India, GST will be applicable.
12 November 2017
under which section of gst?, as in previous laws popos rules 8 is applicable.
26 July 2024
In the context of the Goods and Services Tax (GST) in India, the applicability of GST on services provided outside India but where both the supplier and receiver are in India involves specific provisions under the GST Act.
### **GST Applicability for Services Provided Outside India**
Under the GST regime, if services are provided from India to a location outside India, it is treated as an **export of services**. The key provisions governing this situation are as follows:
1. **Export of Services**:
- **Section 2(6) of the CGST Act, 2017**: Defines "export of services" as the supply of any service when:
- The supplier of the service is located in India.
- The recipient of the service is located outside India.
- The place of supply of the service is outside India.
- The payment for such service is received in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
- The supplier and recipient are not merely establishments of a distinct person.
2. **Zero-Rated Supply**:
- **Section 16 of the IGST Act, 2017**: Exports of services are treated as zero-rated supplies. This means that the supplier of the service can claim a refund of the input tax credit (ITC) on inputs and input services used to provide the export services.
### **Steps to Follow:**
1. **Determine the Place of Supply**:
- For determining whether the supply qualifies as an export of service, refer to **Section 13** of the IGST Act, which deals with the place of supply of services.
2. **Filing GST Returns**:
- **GSTR-1**: You need to report the export of services in GSTR-1. Ensure that you mention the export of services and claim the benefit of zero-rating.
3. **Claiming Refund**:
- **GSTR-3B**: Report the zero-rated supply and claim the refund of ITC in your GSTR-3B and other relevant forms.
- **Refund Application**: File a refund application under **Rule 89** of the CGST Rules, 2017.
### **Relevant Sections and Rules:**
1. **CGST Act, 2017**:
- **Section 2(6)**: Defines "export of services".
- **Section 16**: Allows for the zero-rating of exports.
2. **IGST Act, 2017**:
- **Section 16**: Deals with the zero-rated supply of goods and services.
- **Section 13**: Specifies the place of supply for services.
3. **GST Rules**:
- **Rule 89** of the CGST Rules, 2017: Provides the procedure for claiming a refund of the input tax credit on zero-rated supplies.
### **Example Scenario**:
If an Indian company (A) provides consulting services to a company located in the USA, and both the supplier (A) and the recipient (B) are in India, the consulting services are deemed to be provided outside India. Therefore:
- The supply is treated as an export of services.
- GST will be zero-rated, and the supplier can claim a refund of the input tax credit.
### **Conclusion**
- **GST is not applicable** on the export of services as they are zero-rated under GST.
- The applicable sections are **Section 2(6)** of the CGST Act for the definition and **Section 16** of the IGST Act for zero-rating.
- Follow the procedures for reporting and claiming refunds as per the GST rules.
For any specific case or complex scenarios, consulting a GST expert or tax advisor is advisable to ensure compliance with all relevant provisions and accurate filing.
### **GST Applicability for Services Provided Outside India**
Under the GST regime, if services are provided from India to a location outside India, it is treated as an **export of services**. The key provisions governing this situation are as follows:
1. **Export of Services**:
- **Section 2(6) of the CGST Act, 2017**: Defines "export of services" as the supply of any service when:
- The supplier of the service is located in India.
- The recipient of the service is located outside India.
- The place of supply of the service is outside India.
- The payment for such service is received in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
- The supplier and recipient are not merely establishments of a distinct person.
2. **Zero-Rated Supply**:
- **Section 16 of the IGST Act, 2017**: Exports of services are treated as zero-rated supplies. This means that the supplier of the service can claim a refund of the input tax credit (ITC) on inputs and input services used to provide the export services.
### **Steps to Follow:**
1. **Determine the Place of Supply**:
- For determining whether the supply qualifies as an export of service, refer to **Section 13** of the IGST Act, which deals with the place of supply of services.
2. **Filing GST Returns**:
- **GSTR-1**: You need to report the export of services in GSTR-1. Ensure that you mention the export of services and claim the benefit of zero-rating.
3. **Claiming Refund**:
- **GSTR-3B**: Report the zero-rated supply and claim the refund of ITC in your GSTR-3B and other relevant forms.
- **Refund Application**: File a refund application under **Rule 89** of the CGST Rules, 2017.
### **Relevant Sections and Rules:**
1. **CGST Act, 2017**:
- **Section 2(6)**: Defines "export of services".
- **Section 16**: Allows for the zero-rating of exports.
2. **IGST Act, 2017**:
- **Section 16**: Deals with the zero-rated supply of goods and services.
- **Section 13**: Specifies the place of supply for services.
3. **GST Rules**:
- **Rule 89** of the CGST Rules, 2017: Provides the procedure for claiming a refund of the input tax credit on zero-rated supplies.
### **Example Scenario**:
If an Indian company (A) provides consulting services to a company located in the USA, and both the supplier (A) and the recipient (B) are in India, the consulting services are deemed to be provided outside India. Therefore:
- The supply is treated as an export of services.
- GST will be zero-rated, and the supplier can claim a refund of the input tax credit.
### **Conclusion**
- **GST is not applicable** on the export of services as they are zero-rated under GST.
- The applicable sections are **Section 2(6)** of the CGST Act for the definition and **Section 16** of the IGST Act for zero-rating.
- Follow the procedures for reporting and claiming refunds as per the GST rules.
For any specific case or complex scenarios, consulting a GST expert or tax advisor is advisable to ensure compliance with all relevant provisions and accurate filing.
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