GST ON IMPORT OF SOFTWARE

[CABIJENDERKUMAR BANSAL]

we would like to import software from portugul ,pl note this software will be installed on line ,what r duty ,GST and Other taxes applicable and how to make payments of foreign invoices for soft ware pl advise

[YAGAY andSUN]

Online purchase and installation of software will be treated services, and accordingly GST will be applicable. Form A2 of RBI through you banker (Authorized Dealer) will be submitted along with commercial invoice, PO and CA Certificate for making foreign payments. You would have to inform Customs Department in this regard.

[YAGAY andSUN]

RBI Master Direction

RBI/FED/2016-17/12 FED Master Direction No. 17/2016-17 January 1, 2016 (Updated as on February 02, 2018)

C.7.3. Non-physical Imports

(i) Where imports are made in non-physical form, i.e., software or data through internet / datacom channels and drawings and designs through e-mail / fax, a certificate from a Chartered Accountant that the software / data / drawing/ design has been received by the importer, may be obtained.

(ii) AD Category – I bank should advise importers to keep Customs Authorities informed of the imports made by them under this clause.

[KASTURI SETHI]

Dea Yagay and Sun,

Sir, You have enriched my knowledge also. I have saved your reply as ready recknor on my laptop for future purpose. I ofen receive calls on thiis issue. Thank you very much.

[KASTURI SETHI]

Read 'often' correct word.

[YAGAY andSUN]

Thanks.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Yagay. As correctly told by Shri Sethi it would enrich the knowledge of professionals in GST field.

AI Summary

GST on imported software treated as cross-border service, requiring GST compliance and RBI-aligned foreign payment procedure. Importation of online installed software is a supply of services attracting GST; importers must comply with GST obligations. Foreign payment is to be routed through an Authorised Dealer bank using Form A2, supported by commercial invoice, purchase order and a Chartered Accountant certificate verifying receipt, and importers should inform Customs of non physical imports as advised by AD Category I banks.