TaxTMI 
TaxTMI 
dear expoerts
pl share your valuable guidacne on rcm applicablity on payment made to foreign govt for product registration
rcm applicablity for foregin govt fees
08 Aug 2023 
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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. (AI Summary)
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. (AI Summary)