Dear All,
A software company has to purchase some software licenses from outside India. What it does is, it is telling their employees to purchase these software licenses through their credit cards and the amount incurred by their employees is being reimbursed to them on time to time basis. In this case, whether GST under RCM to be paid by the company as the software is being utilized by the company.
If the bill is on the name of the company then I think, GST under RCM is applicable. But bill is on the name of the employee but the company is utilizing it, then GST Applicable?
Software Company Liable for GST Under RCM When Employees Purchase Licenses with Credit Cards, Experts Advise Direct Handling A software company is purchasing software licenses from abroad by having employees pay with their credit cards, later reimbursing them. This raises the question of whether GST under the Reverse Charge Mechanism (RCM) applies, as the company ultimately uses the software. Experts in the forum agree that the company is the real recipient of the service, making it liable for GST under RCM. They highlight that this practice of using employee credit cards is inappropriate and suggest that the company should directly handle such transactions to avoid tax complications. The discussion also touches on the implications of labeling these transactions as OIDAR services and the potential GST audit risks. (AI Summary)
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