ITC on WCT

[RAVINDER GAMBHIR]

One of my clients got a contract from Indian customer to execute Works Contract Services in Nepal. The material involved and the incidental services will be provided by the suppliers from India. What will be applicability of GST and the availability of ITC as material will have to be moved to Nepal and services will be provided on immovable property situated in Nepal

[Shilpi Jain]

As per proviso to section 12(3) of the IGST Act, PoS would be location of the Indian customer. So there will be liability to pay GST on the WCS. 

ITC should be eligible.

[RAVINDER GAMBHIR]

Thanks Ms Shilpi for the reply. The real issue involved is:

- documents required to move material to Nepal like Invoice, Delivery Challan etc.

- how to make eway bill as this will not be export for my client, but goods will cross custom barrier.

Hope I am clear.

Thanks 

[Shilpi Jain]

- documents required to move material to Nepal like Invoice, Delivery Challan etc.

Invoice will be required for your sale to the Indian customer. The Indian customer will have to file export documents for export through land customs station.

- how to make eway bill as this will not be export for my client, but goods will cross custom barrier.

Normal EWB on the invoice that you have issued to the Indian customer. You can issue the EWB from your place of despatch up to the land customs station since the movement in India is only up to that place.

AI Summary

Place of Supply determines GST liability on cross border works contracts; GST applies and Input Tax Credit is available.
Place of Supply for a works contract with services rendered on immovable property in Nepal is the location of the Indian customer per the proviso to section 12(3) IGST, creating a GST liability and permitting Input Tax Credit; the supplier must invoice the Indian customer, who must undertake export formalities at the land customs station, and the supplier may generate an eway bill from place of dispatch to the land customs station with accompanying delivery challans and invoices.