Import of Service

[Kaustubh Karandikar]

XYZ(India) is receiving management consultancy services from group / parent companies for the last one year. However, neither the group / parent companies had issued invoice on XYZ till date nor XYZ had paid any amount to group / parent companies due to some disputes. Is XYZ required to pay GST on it under reverse charge even if payment not made to them being the services received from group / parent companies?

[MUKUND THAKKAR]

Schedule I of the CGST Act, 2017, the import of services by a taxable person from a related person or from a distinct
person as defined in Section 25 of the CGST Act, 2017, in the course or furtherance of business shall be treated as supply even if it is made without any consideration.

need to Pay Under RCM

[KASTURI SETHI]

I support the views of Sh.Mukund Thakkar, Sir. Such law has been framed to avoid misuse by the assessees.

AI Summary

Import of services treated as supply triggers reverse charge for recipient when related persons provide services without consideration. Schedule I treats receipt of services from a related or distinct person in the course or furtherance of business as a supply even when made without consideration, and where such services are received from a related or distinct person the recipient must account for tax under the reverse charge mechanism irrespective of invoice issuance or payment.