Export of services: outsourced foreign work treated as export if IGST on imported services paid and RBI permits retention. When an Indian supplier outsources part of a contract to a foreign provider, two supplies exist: the Indian supplier's supply to the non resident recipient for the full contract value and the import of services by the Indian supplier for the outsourced portion. The Indian supplier must pay integrated tax under the reverse charge mechanism on the imported portion and may claim input tax credit. The full contract value can be treated as export of services if IGST is paid on the imported portion and RBI permits retention of part of the consideration outside India.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Export of services: outsourced foreign work treated as export if IGST on imported services paid and RBI permits retention.
When an Indian supplier outsources part of a contract to a foreign provider, two supplies exist: the Indian supplier's supply to the non resident recipient for the full contract value and the import of services by the Indian supplier for the outsourced portion. The Indian supplier must pay integrated tax under the reverse charge mechanism on the imported portion and may claim input tax credit. The full contract value can be treated as export of services if IGST is paid on the imported portion and RBI permits retention of part of the consideration outside India.
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