RCM on debit note raised by foreign agent to C&F principal in India

RCM on debit note raised by foreign agent to C&F principal in India

Carriage services from outside India to reach final destination in India, and c&f principle is in India and billing local importer along with GST.. 

Now foreign agent raising debit note for his commission part. 

Question:
1. Whether this is treated as import and RCM is applicable?
2. How does the taxation differs if c&f in India is agent..?

Pls do the needful.

Asked 5 years ago in GST

It will be technically regarded as import as the place of supply of service would be in India.

Since this is an import of service it would be covered under RCM and the service receiver will have to pay GST on such import of service and can claim ITC on such import.

However I have heard that RCM mechanism is postponed in GST so you can check if it's active now you need to pay GST on such import under RCM

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Thank you

Naman Maloo

CA, Jaipur

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Hi,

- It will be treated as import of service and RCM is applicable on it.

- In case of pure agent, reimbursement of expenses is not taxable but in your case foreign agent is providing service to Indian agent or principal. It is an expense for Indian entity so RCM will be applicable whether you are acting as agent or principal.

Thanks

Vivek Kumar Arora

CA, Delhi

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Dear Sir,

Hope you are doing well !

1. It will be treated as import of services and RCM applicable on it.

2. No difference in taxation even if your are providing services to Indian agent. It will be treated as expenses for Indian entity. Accordingly, RCM will be applicable.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

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1. It will be treated as import of services and Indian c&f principal will have to pay gst under RCM.

2. If Indian c&f is an agent, then agent will raise invoice for it's services to foreign principal and if foreign principal pays in foreign currency, then it can be treated as export of services. However, we need to understand the arrangement in detail.