Repairs carried out outside India

[Kaustubh Karandikar]

XYZ(India) exported the goods to PQR(U.K.). On examining the goods on receipt, it was observed by PQR that it requires certain repairs which PQR did on his own and the repairing charges was recovered from XYZ. Will this transaction fall under Section 13(2) of IGST Act and therefore XYZ liable for reverse charge or it will fall under Section 13(3)(a) i.e. location where the services are actually performed and since it is performed outside India, XYZ not liable under RCM? In my view, it will fall under Section 13(3)(a) and therefore no RCM for XYZ. Views of the experts please.

AI Summary

XYZ Not Liable for Reverse Charge on Repairs by PQR: Section 13(3)(a) of IGST Act Applies XYZ (India) exported goods to PQR (U.K.), which required repairs upon receipt. PQR conducted the repairs and charged XYZ. The query concerns whether this transaction falls under Section 13(2) of the IGST Act, making XYZ liable for reverse charge, or under Section 13(3)(a), as the services were performed outside India, exempting XYZ from reverse charge. The consensus among respondents is that Section 13(3)(a) applies, and reverse charge is not applicable. Alternatives like issuing a credit note were discussed, but it may affect export benefits.