GST REGISTRATION for IT Overseas Services

This query is : Resolved

ADITYA (Querist)
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23 June 2022 Dear Experts
Please guide me :-
IT services providing to Overseas Customers
Invoices raised in USD / Payment credited in Bank Account in INR
Turnover is less than Thrash Hold Limit
Query
1 GST Registration Applicability ?
Can GST Registration be taken voluntary before Trash Hold Limit
2 GST Liability tax rate ?
3 GST Formalities ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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07 July 2024 Based on your scenario of providing IT services to overseas customers and the specifics of invoicing and payment, here are the answers to your queries regarding GST registration, liability, and formalities:

1. **GST Registration Applicability**:
- Since your turnover from export of services (services provided to overseas customers) is less than the threshold limit (Rs. 20 lakhs or Rs. 10 lakhs for special category states), registration under GST is not mandatory.
- However, you have the option to voluntarily register for GST even if your turnover is below the threshold. Voluntary registration allows you to claim input tax credit (ITC) on your business inputs and expenses, which can be beneficial.

2. **GST Liability Tax Rate**:
- For export of services (IT services provided to overseas customers), the GST rate applicable is 0%. This means you do not charge GST on your invoices for export services. This is in line with GST regulations to promote exports and is known as zero-rated supply.
- You will need to file GST returns to claim any refund of the input tax credit (ITC) accumulated on inputs used to provide these services.

3. **GST Formalities**:
- **Invoicing**: Issue invoices in USD for services provided to overseas customers. Ensure invoices comply with GST rules and contain necessary details such as your GSTIN (if registered voluntarily), customer details, nature of service, etc.
- **Payment**: Payments received in INR from overseas customers for exported services are considered export proceeds. These are generally eligible for benefits under export promotion schemes and can be credited to your bank account in India.
- **GST Returns**: If registered voluntarily, file monthly or quarterly GSTR-3B returns depending on your turnover. For export of services, file GSTR-1 to report your zero-rated supplies. You may also need to file GSTR-9 annually and, if applicable, GSTR-9C (audit form).
- **Refund Process**: To claim a refund of accumulated input tax credit (ITC), file a refund application using Form RFD-01 on the GST portal. Ensure all supporting documents are submitted along with the application.

**Steps for Voluntary GST Registration**:
- Visit the GST portal (https://www.gst.gov.in/) and navigate to 'Services' > 'Registration' > 'New Registration'.
- Fill out the necessary details including business information, PAN, business address, bank account details, and authorized signatory details.
- Choose the appropriate SAC code (typically for IT services) and provide other relevant information.
- Upload required documents such as identity and address proofs, proof of business address, bank account statement, and authorization documents.
- Submit the application and pay the required fees online.
- Once approved, you will receive your GSTIN and can start complying with GST regulations for your export of services.

It's recommended to consult with a GST professional or tax advisor to ensure compliance with all GST regulations and to understand the implications of voluntary registration on your business operations and taxes.