Reverse Charge Mechanism (RCM) for foreign testing services where goods are procured and used abroad.

[saravjit singh]

The foreign supplier provides testing services to an Indian recipient, where:

1. Goods are procured and used abroad by the supplier.

2. Testing is done as per the recipient's specifications.

3. The testing report is sent to the Indian recipient.

4. Payment is made by the Indian recipient.

Whether the recipient would be liable to pay GST under RCM, considering the place of supply is in India (recipient's location).

AI Summary

Foreign testing services may trigger GST reverse charge despite goods remaining abroad under Section 13 A discussion addressed GST liability under Reverse Charge Mechanism for foreign testing services where goods are procured and used abroad by the supplier, testing is performed per Indian recipient's specifications, and reports are sent to India with payment made by the Indian recipient. The first respondent argued that since goods remain outside India and testing occurs abroad without goods being brought to India or made available to the service provider in India, this does not qualify as 'import of service' under IGST Act Sections 2(11) and 13(2), making RCM inapplicable. The second respondent suggested potential liability exists since goods are not provided by the service recipient, indicating Section 13(3) of IGST may not apply, recommending contract review for proper analysis and advice.