Quick Summary
Indian corporates are currently navigating a complex landscape of GST compliance, particularly concerning self-invoicing and the reverse charge mechanism (RCM) for services received from foreign entities. The government has been issuing circulars to address these concerns, but the pace of these developments has been somewhat gradual. Recently, Infosys secured partial relief from demands raised by the Directorate General of GST Intelligence (DGGI) over free services rendered by its related forei
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FAQ :
The main challenge is navigating GST compliance for self-invoicing and the reverse charge mechanism (RCM) when receiving services from foreign entities.
The self-invoice raised by the Indian counterpart is the critical document for GST compliance, and its stated value forms the basis for any GST demand, according to Section 31(3)(f) of the CGST Act.
Yes, Infosys recently secured partial relief from GST demands concerning free services provided by its related foreign subsidiaries, indicating possible relief for other companies.
The ruling established that service tax on RCM applies to expatriate salaries, a principle extended under GST to treat services provided without consideration by foreign entities to related Indian companies as a supply liable for RCM GST.
It clarified that if an eligible Indian branch provides services to another branch of the same company and no invoice is raised, with the receiving branch eligible for full Input Tax Credit (ITC), the supply value is treated as NIL, and no GST applies.
Yes, questions remain regarding the treatment of invoices from foreign subsidiaries and the interpretation of 'distinct persons' under Section 8 of the IGST Act 2017.
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