• US company providing consulting services to India

Hello,

We are a NJ based consulting company providing consulting services to International company with leaders based in India. We subcontract to consulting to an India based consultant. so 2 questions:
1- Are we as a US based Partnership subject to the GST tax on the invoice we submit to the client.
2-do we need to pay the subcontractor GST on their fee ( transferring the fee in USD)
thank you
angie
Asked 8 months ago in GST

Dear Angie,

 

Please note that your company being incorporated outside India would not be governed by GST laws. Your Indian consultant and as well as your Indian clientele on the contrary would have to comply with the said applicable laws.

 

In relation to this the invoice being submitted by you to your clients would not be applicable to any Indian Tax viz GST and the same needs to be complied by your client at their own end under Reverse Charge. Please check for the applicability of any US laws.

 

Further the fee charged by your subcontractor would also, for you, not have any GST implication and any compliance needs to be done by the subcontractor at his end, and no burden of the same would be applicable on you.

 

Please advise in case of any further clarification.

 

Thanks & Regards,

CA Aditya Dhanuka.

https://www.linkedin.com/in/aditya-dhanuka-69824451/

Aditya Dhanuka
CA, Kolkata
59 Answers
2 Consultations

5.0 on 5.0

Hi

 

1. No. Both the transactions are separate contracts. Hence, you aren't liable to GST in India.

 

2. The Indian subcontractor providing services to you as a service receiver located outside India shall be considered as zero rated supply. GST shall not be charged to you.

Lakshita Bhandari
CA, Mumbai
5657 Answers
807 Consultations

5.0 on 5.0

Hi Angie,

 

Hope you are doing well and in good health.

 

Transaction 1 - NJ based company (Service provider) billing to Indian client (Service recipient) - No GST is payable by NJ based company as you are located outside the Indian territory.  Indian based company is liable to pay GST on reverse charge mechanism (RCM) @18%. NJ based company is not liable to show any GST tax figure on the invoice to be raised to Indian client.

 

Transaction 2 - Indian subcontractor (Service provider) billing to NJ based company (service recipient) for consulting services- The services provided by Indian subcontractor to NJ based company falls under the definition of zero export of services and not liable to charge any GST on their invoices to be raised to NJ based consulting company.

The Indian subcontractor is liable to deduct TDS under the Income tax Act.

 

For detailed discussion, you may opt for phone consultation

 

Regards

CA Vivek Kumar Arora

 

Vivek Kumar Arora
CA, Delhi
4476 Answers
606 Consultations

5.0 on 5.0

1. No

2. It will be nil rates supply by your sub contractor. So.no GST needs to be paid 

Vidya Jain
CA, Kolkata
974 Answers
57 Consultations

4.8 on 5.0

1. If you are taking service from sub contractor on principal to principal basis then since you don't have any place of business in India no need to register or pay GST. Your client would pay GST on same in India.

 

2. Your sub contractor cannot charge GST from you.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
4053 Answers
67 Consultations

5.0 on 5.0

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