GST on bank charges

[Kaustubh Karandikar]

XYZ(India) transferred amount to the bank of the foreign supplier against import of goods. The foreign bank deducted their charges and paid the balance amount to the foreign supplier. Foreign supplier recovered these bank charges XYZ in foreign currency. Is XYZ required to pay GST under reverse charge on this amount paid?

AI Summary

Is XYZ liable for GST under reverse charge on foreign bank charges deducted before supplier payment? XYZ (India) transferred money to a foreign bank for importing goods, and the foreign bank deducted charges before paying the supplier. The query is whether XYZ must pay GST under reverse charge on these charges. One participant suggests paying GST under reverse charge and claiming Input Tax Credit (ITC) due to uncertainty. Another argues that since XYZ did not receive services from the foreign bank, GST under reverse charge is not applicable, but advises checking valuation issues for customs and IGST. There is also a request for clarification on how the payment is recorded in the importer's books.