20 April 2023
I have a bill payment receipt paid to Godaddy USA, with GSTN 9917USA29016OS6 mentioned on it. Is RCM applicable to this? They have charged any GST, also they have not provided me with the Invoice, only the receipt. The payment was made in INR. The service taken is Domain and Web Hosting with SAC 998315.
Also, can you help in sharing the Entry to be made to the books of accounts, with IGST? So, I can claim the GST ITC on this!
07 July 2024
In the scenario where you have made a payment to GoDaddy USA for domain and web hosting services, here’s how you can handle it from a GST perspective:
1. **Reverse Charge Mechanism (RCM):** - Since GoDaddy USA is a foreign service provider and you are a recipient in India, GST is applicable under the reverse charge mechanism (RCM). As per GST rules, for services provided by a foreign entity to a recipient in India, the recipient is liable to pay GST under RCM. - GoDaddy USA has not charged you GST on their invoice, which is common in such transactions.
2. **Invoice and Receipt:** - If GoDaddy USA has not provided an invoice and only issued a receipt, it's important to ensure that all necessary details for GST compliance are available. The receipt should mention the GSTN (9917USA29016OS6 in your case) and ideally, it should mention the amount paid, description of services, and other relevant details.
3. **Entry in Books of Accounts:** - Since you are liable to pay GST under RCM, you should record the transaction as follows: - **Expense Account (Domain and Web Hosting Expenses):** Debit the expense account with the amount paid to GoDaddy USA. - **RCM Liability Account:** Credit this account with the amount of GST payable under RCM. - **IGST Payable (or CGST and SGST, depending on the nature of the service):** Credit IGST payable account if it's an interstate transaction.
4. **Claiming ITC (Input Tax Credit):** - You can claim the ITC (Input Tax Credit) for the IGST paid under RCM against your output GST liability, if any. - Ensure you have proper documentation, including the payment receipt and evidence of the transaction, to support your claim for ITC.
**Sample Entry:**
Assuming you paid INR 10,000 (including IGST) to GoDaddy USA for domain and web hosting services:
- Expense Account (Domain and Web Hosting Expenses): **Debit** INR 10,000 - IGST Payable (under RCM): **Credit** INR 1,800 (assuming IGST rate of 18%)
Make sure to consult with your tax advisor or accountant for specific guidance tailored to your business and to ensure compliance with GST regulations. This will help you manage your GST liabilities and ITC claims correctly.
CAclubindia
