RCM APPICABILITY FOR SERVICES PROVIDER FOR OVERSEA VENDOR, Goods and Services Tax - GST

[RAJIV PATEL]

Dear Sir,

May we request you to kindly advice & guide us on the applicability of GST & RCM on our case. Your comment & support will be highly appreciated.

Stage 1 - We are presently buying hotel & transport from Bhutan. The Bhutan operator does not charge any GST as it does not fall in Indian tax jurisdiction. Hence let take our purchase price as INR 100

Stage 2 – Now when we sale the package to X agency in Indian then we bill the agency with GST of 5%.

Here our sale become our Bhutan Purchase INR 100 + Our markup 10 (100 + markup 10 ) + GST of 5% on 110 +5% GST = INR 115.50

Comments required

• Are the above transaction fine as per the current GST procedure
• Do we need to charge RCM of 5% on our purchase price from Bhutan i.e 100
• In case we charge RCM then our tax components become 10%
• Will we get input credit for paying the RCM for oversea supplier who is not part of Indian tax jurisdiction.
• In case we don’t get input credit then our product become 10% higher in compare to any direct supplier from Bhutan to come to india and lock in business. Anyway we are already higher by 5% as we are paying GST of 5% hence RCM will become a extra loading for us.

Your comment & advice will be highly appreciated

Regards

Rajiv

Posts / Replies

[Kishan Barai]

RCM would be Applicable if purchase price is above 5000 INR from India Only

[Ganeshan Kalyani]

In my view purchase from Bhutan is an import. The IGST paid on such purchase is an eligible credit.

[subramanian vijayakumar]

Yes it is interstate. Supply. IGST IS ATTRACTED I THINK IAM SUPPOSED TO BE CORRECT