Import of Service

[Kaustubh Karandikar]

1. XYZ exported the goods which needs some rework / repairs at the customer’s premises outside India. The subsidiary Companies outside India had done the required rework / repairs on behalf of XYZ and recovered the amount in foreign currency from XYZ. Is XYZ required to pay GST under reverse charge? In my view, it will fall under Section 13(3)(a) of IGST Act i.e. in case of services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services, the place of supply shall be the location where the services are actually performed and therefore no GST since the services are performed outside India. Views of the experts please.

2. XYZ exported the goods which needs some rework / repairs at the customer’s premises outside India. The customer had done the necessary rework / repairs and recovered the amount in foreign currency from XYZ. Is XYZ required to pay GST under reverse charge? In my view, it will fall under the default section i.e. Section 13(2) of IGST Act i.e. the place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services and since the recipient i.e. XYZ is in India, XYZ is liable to pay GST under reverse charge. Views of the experts please.

AI Summary

Debate on XYZ's GST Liability Under Reverse Charge for Overseas Repairs: Expert Opinions and IGST Act Interpretations A discussion on a forum revolved around whether XYZ, a company exporting goods that require repairs abroad, is liable to pay GST under reverse charge for services performed outside India. The initial query suggested that no GST is payable as services are performed outside India. Responses varied, with some experts agreeing that no GST is applicable under reverse charge due to the location of service provision. Others referenced GST Council clarifications, suggesting GST is payable on repair value, insurance, and freight. The discussion included interpretations of relevant sections of the IGST Act and opinions on the nature of service transactions.