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?

AI Summary

Indian firm XYZ faces GST under reverse charge for consultancy services from related companies despite no payments. XYZ, an Indian company, has been receiving management consultancy services from its group or parent companies for a year without receiving invoices or making payments due to disputes. The query is whether XYZ must pay Goods and Services Tax (GST) under reverse charge despite no payment being made. Mukund Thakkar clarified that under Schedule I of the CGST Act, 2017, services imported from a related or distinct person in business are considered a supply, even without consideration, requiring payment under reverse charge. Kasturi Sethi agreed, emphasizing the law's intent to prevent misuse by taxpayers.