TMI BlogGST on TDS against import of serviceX X X X Extracts X X X X X X X X Extracts X X X X ..... In continuation of my earlier email on the same, XYZ (India) paying GST under reverse charge on import of service. XYZ also paying TDS under the Income Tax Act on the amount paid to the foreign service provider details of which are given herein below under two different situations: Situation 1 (As per the terms of the contract, the foreign supplier wanted full payment as per Invoice Value w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout any deduction) Details Amount (₹) Invoice Value of the foreign Supplier 2452573.32 TDS Calculated on the Invoice Value i.e., on ₹ 2452573.32 and paid to the Govt. 613143.33 GST paid under reverse charge on the Invoice Value i.e., on ₹ 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52573.32 441463.20 Situation 2 (There was no mention in the terms of the contract by the foreign supplier that he want full payment as per Invoice value without any deduction) Details Amount (₹) Invoice Value of the foreign Supplier 613825.17 Actual amount pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to foreign supplier after deducting TDS paid to Indian Govt. of ₹ 61383 552442.17 TDS Calculated on the Invoice Value i.e., on ₹ 613825.17 and paid to the Govt. 61383.00 GST paid under reverse charge on the Invoice Value i.e., on ₹ 613825.17 110488.53 Under Situation - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, whether XYZ is required to pay GST under reverse charge on ₹. 2452573.32+ ₹ 613143.33 or on ₹. 2452573.32? Whether the GST paid under reverse charge under Situation 2 is correct? What is he correct position of law under GST? In my view, under Situation 1, the GST is required to be paid on ₹. 2452573.32+ ₹ 613143.33. The GST paid under Situation 2 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s correct. Views of the experts please. - Reply By Rajagopalan Ranganathan - The Reply = Sir, You have to pay gst on the invoice value without any deduction namely TDS paid to Income tax ue +TDS ampount paid to IT Department.Department. You need not pay gst on invpoice value + TDS amount paid to IT Department. Situation-2 indicates the correct position. - Reply By Shilpi Jain - The Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... = 2023 (3) TMI 802 - CESTAT CHENNAI - VSL India Private Limited The TDS is a tax obligation which can never partake the character of value or consideration for the transaction or of the goods or of services. ; In turn, CESTAT finds that when TDS is not received from a non-resident since it is not towards value/consideration, there is no merit in requiring a resident (assessee) to include t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he TDS in the value of services; it is understood to mean that the assessee has indeed received only the amount as agreed towards value/consideration and the expenditure towards TDS are met by the assessee. So, when such TDS is not received from the non-resident since it is not towards value/consideration, there is no merit in requiring such assessee to include even the TDS it paid in the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f services, as in the case on hand - Reply By Shilpi Jain - The Reply = Another aspect to note here is that the TDS paid in respect of the services received from a foreign national is at a different footing from the TDS paid in respect of services received from an Indian. GST liability would not arise for amount of TDS where services received from the foreign national. It is suggested that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable changes be made in the agreement in situation 2 in the query (assuming it is not a hypothetical case) to avoid disputes from the department. - Reply By Padmanathan Kollengode - The Reply = Your views are absolutely correct. 1. Under Situation -1, whether XYZ is required to pay GST under reverse charge on ₹. 2452573.32+ ₹ 613143.33 or on ₹. 2452573.32? Yes. He has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay GST on Rs.2452573.32+ Rs.613143.33 being the actual consideration. 2. Whether the GST paid under reverse charge under Situation 2 is correct? Yes. GST is payable on Rs.613825.17 being the consideration paid - Reply By Padmanathan Kollengode - The Reply = On further thinking, 1. How is the transaction accounted in books of accounts in both scenarios? Pls provide journal entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with amount if possible. 2. How is the transaction reflected in TDS returns? 3. Whether the Foreign entity is taxable in India? are they claiming this TDS? - Reply By Kaustubh Karandikar - The Reply = thanks shilpi ji and Padmanathan ji for your valued advice. Under the Service Tax regime, there was the concept of grossing up of TDS amount in case of import of service where service tax wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable on the grossed up amount. If we extend the same analogy, GST will be applicable under situation - 1. Your views please. - Reply By Shilpi Jain - The Reply = The case shared above indicates that no ST to be paid on TDS. - GST on TDS against import of service - Query Started By: - Kaustubh Karandikar Dated:- 28-3-2023 Goods and Services Tax - GST - Got 7 Replies - GST - Discussion For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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