Place of supply - performance based service

[Kaustubh Karandikar]

Goods are imported by XYZ, India from foreign buyer PQR . After receiving the goods, it is found that the goods are deficient in terms of its quality. Therefore, XYZ had performed some re – work / repair on it before putting it in to use. The re – work / repair charges were recovered from the foreign supplier PQR by issuing a Debit Note. Is XYZ required to pay GST on it? Sir, in my view, it will fall under Section 13(3)(a) of IGST Act i.e. services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services and accordingly since the repairs is performed in India, XYZ will be liable to pay GST. Please confirm.

AI Summary

Indian Company XYZ Debates GST Liability on Repair Services Under Section 13(3)(a) of IGST Act XYZ, an Indian company, imported goods from a foreign supplier, PQR. Upon finding the goods deficient in quality, XYZ performed repairs and charged PQR for these services through a Debit Note. The query raised was whether XYZ is liable to pay GST on the repair services. One respondent argued that under Section 13(3)(a) of the IGST Act, since the repairs were performed in India, XYZ should pay GST. Another respondent contended that the recovery from PQR is not a separate supply and should not attract GST as a separate transaction.