Statutory Compliances for Payment to International Suppliers via Credit Cards

[AshaKanta Sharma]

Hi Experts,

Please guide regarding statutory compliance needs to be followed in order for payments being made via Credit Cards to suppliers outside India. Do we need to pay GST on RCM Basis and whats are the compliance required in terms of Income Tax Deductions for the said payments.

Please help me on this....

Thanks

Asha Kanta Sharma

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[YAGAY andSUN]

A person resident in India may make payment for import of goods in foreign exchange through an international card held by him/in rupees from international credit card/ debit card through the credit/debit card servicing bank in India against the charge slip signed by the importer or as prescribed by Reserve Bank from time to time ,provided that the transaction is in conformity with the extant provisions and the import is in conformity with the Foreign Trade Policy in force. (Para B.4 iii of the RBI Master Directions.).

If it is related to goods then no TDS will be required to be deducted and Bill of Entry needs to be filed. If it is related to import of Services then GST is required to be paid under Reverse charge.

AI Summary

Clarification on using credit cards for international supplier payments: TDS not needed for goods; GST applies to services. A participant inquired about the statutory compliance for making payments to international suppliers via credit cards, specifically regarding Goods and Services Tax (GST) and income tax deductions. The response clarified that payments for importing goods can be made in foreign exchange through international credit cards, provided they comply with Reserve Bank of India regulations and the Foreign Trade Policy. No Tax Deducted at Source (TDS) is required for goods, but a Bill of Entry must be filed. For services, GST must be paid under the Reverse Charge Mechanism.