rcm applicablity for foregin govt fees

[VIPUL JHAVERI]

dear expoerts

pl share your valuable guidacne on rcm applicablity on payment made to foreign govt for product registration

[Padmanathan KV]

I also concur with views of Kasturi Sir, that the subject matter is taxable as 'import of service'.

As advised by experts, the querist should try to pay the applicable taxes with interest and avoid penalty u/s 73/74 etc. I also urge the querist not to fall for any 'out of box' solutions when the subject matter seems to be clearly taxable in Law, as such fancy ideas will only end up in a long-drawn litigation culminating in huge interest and penal consequences. Rather focus should be on admitting the tax and interest, and buying 'peace'.

AI Summary

Reverse charge mechanism: payments to foreign government for product registration treated as import of services and taxable.
Payments to a foreign government for product registration are characterised as a supply of services constituting an import of services and taxable under the reverse charge mechanism; exemptions in relevant notifications are confined to Indian governmental functions and do not generally relieve such foreign-government fees from RCM. Alternative classifications (goods, actionable claim, intermediary) are viewed as weak and likely to prompt protracted litigation. Practical advice is to discharge tax under RCM with interest to mitigate risk of assessments and penalties and preserve entitlement to input tax credit where applicable.