Reverse charge on repairs carried out outside India

[Kaustubh Karandikar]

XYZ (Manufacturer from India) received back the goods from PQR (U.K.) after repairs under the cover of a Bill of Entry for the repaired goods and XYZ had taken credit of the IGST charged in the Bill of Entry. PQR had carried out the repairs outside India i.e. in U.K. PQR had issued a separate Invoice to XYZ towards repair charges in foreign currency. Is XYZ liable to pay GST on it under reverse charge? If yes under which section?

[SHARAD ANADA]

Please refer Sec 2(11) of IGST Act 2017 for definition of import of service and Sec 13(3)(a) of IGST for POS. in my view this transaction is not a transaction of import of services as POS is not in India as per Sec 13(3)(a)

[Kaustubh Karandikar]

Yes sir, fully agree. thanks.

AI Summary

Place of Supply rules determine no reverse charge for cross-border repairs when POS outside India. The repair transaction does not qualify as an import of services because the place of supply of the repair services is not in India under the Place of Supply rule, and therefore the reverse charge mechanism is not attracted for the Indian recipient in respect of those repair charges.