Providing Software Services from India - GST chargability, Goods and Services Tax - GST

[Balakrishnan Ramalingam]

Dear sirs,

My client (Individual) is providing software services sitting in India to foreign concern. He receives payment through online payment service portals in Indian Rupees. (specifically not routed through approved banking channel). Now my questions are:

1. Should he be liable to GST?

2. If yes, can this transaction be considered as 'Export of Service?

3. If yes, can we claim 'zero rated' invoice and claim exemption by giving LUT? or alternatively can we pay GST and claim refund?

Thanks and regards

R.Balakrishnan FCA

Posts / Replies

[KASTURI SETHI]

Dear Querist,

Query-wise reply is as under:-

1.Yes.

2. Can be considered as export of service subject to the parameters laid down in Section 2(6) of IGST Act, 2017

3. Both options are available to you.

Pl. note that regarding the receipt of payment in Indian rupees, the words, ' [or in Indian rupees wherever permitted by the Reserve Bank of India] has been inserted in clause (iv) of Section 2(6) of IGST Act on 1.2.2019 by Section 2 of IGST Amendment Act, 2018 (32 of 2018) but the effective date is still to be notified. So you will have to wait for if the payment is to be received in Indian rupees. When the date will be notified, conditions may be enforced.

 

[Mahadev R]

I concur with Kasthuri Sir

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of both the experts.