RCM payment by Exporter

[Shamim Ibrahim]

One of my client XYZ Ltd who is engaged in 100% export of Services utilises certain input services (Software rights) from a foreign company ABC who has no PE and GST registration in India. Whether XYZ Ltd requires to pay GST under RCM on the software rights purchased from foreign compnay ABC ?

The payments to ABC are on quarterly basis and the TDS provisions under Income tax Act has been complied.

Please advice.

Thanks in advance

AI Summary

Reverse charge on imported software rights is payable by the exporter, but refundable as input tax credit for exports.
Reverse charge applies where an Indian exporter procures software rights from a foreign supplier without GST registration; the exporter must pay GST under reverse charge and may claim that GST as input tax credit or refund for exported services where permitted. Compliance steps include obtaining a Chartered Accountant certificate evidencing receipt for non-physical imports and informing customs as guided by RBI, while TDS under income tax is a separate compliance matter.