Place of supply and type of GST payable

[Kaustubh Karandikar]

XYZ(India) imported goods from PQR(UK). These goods were found defective and XYZ did the repairs in India and recovered the repairing cost from the foreign supplier viz. PQR(UK). In my view, this will fall under Section 13(3) of IGST Act, and as per that since the services are performed in India, XYZ is required to pay GST i.e., CGST + SGST since place of supply is India. However, while filing returns / paying tax, by default it is taking IGST and not allowing to pick up CGST + SGST. Views of the experts please.

[Shilpi Jain]

There is no service provided by pqr to xyz. Supplier is in india and recepient in india. Only reimbursement claimed by xyz. In my viewnshould not be an jmport of service. In this case also terms of agreement ard important

AI Summary

Place of supply rules determine whether repairs paid by a foreign supplier attract domestic GST or import tax treatment. Repairs performed in India on imported goods with repair costs recovered from the foreign supplier raise whether the place of supply is India-yielding CGST and SGST-or whether the recovery is a mere reimbursement not constituting an import of service. The legal characterisation turns on whether consideration from the non resident amounts to payment for services and on the contractual allocation of supplier and recipient roles, which together determine whether IGST or CGST+SGST applies.