RCM on drawing charges paid

[Kaustubh Karandikar]

XYZ (Belgium) had placed an order on PQR(India)for supply of Machinery. The drawings relating to these Machinery was supplied by XYZ to PQR and issued an Invoice on PQR towards recovery of Drawing charges. Is PQR required to pay GST under reverse charge on the amount paid to XYZ? In my view, it will fall under Section 13(2) of IGST Act and therefore, PQR will be liable to pay GST under reverse charge. Views of the experts please.

AI Summary

Debate on GST Liability for Drawing Charges Under Section 13(2) of IGST Act: Contract Terms are Key XYZ, a company in Belgium, ordered machinery from PQR in India and provided drawings for the machinery, invoicing PQR for drawing charges. The query is whether PQR must pay GST under reverse charge for these charges. One participant believes PQR must pay GST under Section 13(2) of the IGST Act. Another suggests that if the contract specifies the machinery must be based on the drawings, this liability may be avoided. A third opinion is that there is no supply of drawings, emphasizing the importance of contract terms in determining GST liability.