Applicability of GST

[MURAGAIAH MELANGI]

Dear All,

i have one more query regarding applicability of GST, we are registered Company in Hyderabad, our corporate office at Spain, every month we are doing BIM Design works / Drafting works, the reports will deliver by an email and Server to Spain Office, monthly hourly basis we will Invoice it in Euros to our Corporate Office (Spain), after 2 months they will credit to our Bank, the bankers will converted in to INR,

However so far we are filing GST Monthly Returns, these sales we are showing Export Services and no GST payment.

Please let me understand why this is not taxable? GST not Charged? What is LUT?

Thanks!

MURAGAIAH MELANGI

9000181579

[Alkesh Jani]

Sir,

Please refer to Issue ID = 114002, reiterating Para 2 of Schedule-I of CGST Act, 2017, the services rendered by you to your corporate office is “supply” even if made without consideration, however, in your case, it is export of service, and same is treated as “zero-rated” supply under GST, whereby, you can export without payment of IGST, under LUT (Letter of Undertaking) or with payment and claim for refund.

LUT means, the registered person undertakes that he will pay the tax, if the goods and or services are not exported by him.

Our experts may like to correct me if mistaken.

Thanks

[Ganeshan Kalyani]

Refer Section 54 of CGST, Act for Refund provision.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of experts.

[CASusheel Gupta]

By Spain Office you mean a company incorporated in spain and not a branch of your Hyderabad company.

If so, it is export of services.

If not so, it is not export of services.

Thanks and Regards

CA Susheel Gupta

8510081001, 9811004443

AI Summary

Export of services treated as zero-rated supply; LUT permits export without IGST or claim refund under refund provisions. Cross-border BIM design services billed by the Hyderabad entity to a distinct corporate office abroad qualify as export of services and are zero-rated, permitting export without IGST under a Letter of Undertaking (LUT) or with tax payment followed by refund; the export treatment depends on whether the foreign counterparty is a separate company rather than a branch.