TaxTMI 
TaxTMI 
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?
GST on bank charges
01 Apr 2023 
3 Replies 
1478 Views Asked by
Reverse charge liability for foreign bank charges questioned; conflicting views on whether importer must pay GST under RCM.
Whether an Indian importer must pay GST under the Reverse Charge Mechanism on bank charges deducted by a foreign bank is disputed. One opinion recommends paying reverse charge and claiming input tax credit; another holds no GST is due because the foreign bank did not supply services to the Indian importer for RCM purposes. The issue also engages customs and IGST valuation and how the importer should account for the charge-as part of the goods' value or a separate expense. (AI Summary)
Whether an Indian importer must pay GST under the Reverse Charge Mechanism on bank charges deducted by a foreign bank is disputed. One opinion recommends paying reverse charge and claiming input tax credit; another holds no GST is due because the foreign bank did not supply services to the Indian importer for RCM purposes. The issue also engages customs and IGST valuation and how the importer should account for the charge-as part of the goods' value or a separate expense. (AI Summary)