RCM APPICABILITY FOR SERVICES PROVIDER FOR OVERSEA VENDOR

[RAJIV PATEL]

Dear Sir,

May we request you to kindly advice & guide us on the applicability of GST & RCM on our case. Your comment & support will be highly appreciated.

Stage 1 - We are presently buying hotel & transport from Bhutan. The Bhutan operator does not charge any GST as it does not fall in Indian tax jurisdiction. Hence let take our purchase price as INR 100

Stage 2 – Now when we sale the package to X agency in Indian then we bill the agency with GST of 5%.

Here our sale become our Bhutan Purchase INR 100 + Our markup 10 (100 + markup 10 ) + GST of 5% on 110 +5% GST = INR 115.50

Comments required

• Are the above transaction fine as per the current GST procedure
• Do we need to charge RCM of 5% on our purchase price from Bhutan i.e 100
• In case we charge RCM then our tax components become 10%
• Will we get input credit for paying the RCM for oversea supplier who is not part of Indian tax jurisdiction.
• In case we don’t get input credit then our product become 10% higher in compare to any direct supplier from Bhutan to come to india and lock in business. Anyway we are already higher by 5% as we are paying GST of 5% hence RCM will become a extra loading for us.

Your comment & advice will be highly appreciated

Regards

Rajiv

AI Summary

Service Provider Questions GST and RCM on Bhutanese Vendor Transactions; Clarification on Input Credit and Pricing Impact A service provider inquires about the applicability of Goods and Services Tax (GST) and Reverse Charge Mechanism (RCM) on transactions involving purchasing hotel and transport services from a Bhutanese vendor. The vendor does not charge GST as it is outside Indian jurisdiction. The provider sells the package to an Indian agency, including a markup and 5% GST. Concerns include whether to apply RCM on the purchase price, eligibility for input credit, and the impact on pricing. Responses suggest RCM applies only for purchases above INR 5000 within India, and IGST on imports is eligible for input credit.