Section 2(11) deals with ‘Import of services’, which means the supply of any service, where-
(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;
Let’s discuss the related aspects of ‘import of services’.
Whether consideration is required or not
As per section 7(1)(b) of CGST Act, 2017, import of services for a consideration whether or not in the course or furtherance of business shall be considered as supply.
In other words, imports of services without consideration shall not be considered as supply.
| As per the provisions in schedule I of CGST Act, 2017, the import of services by a taxable person from a related person or from a distinct person as defined in Section 25 of the CGST Act, 2017, in the course or furtherance of business shall be treated as supply even if it is made without any consideration. |
In nutshell:
| Nature of Service | Consideration | Business Test |
| Import of services | Necessarily Required | Not required |
| Import of services by a taxable person from a related person or from a distinct person | Not required | Necessarily Required |
What about the services which are imported from Google and Facebook??
Import of free services from Google and Facebook by all of us, without any consideration, are not considered as supply. Import (Downloading) of a song for consideration for personal use would be a service, even though the same are not in the course or furtherance of business. Import of some services by an Indian branch from their parent company, in the course or furtherance of business, even if without consideration, will be a supply.
Import of services made on or after the appointed day
Under this, following 3 cases shall be covered:
If imports made on or after the appointed date
As per section 21 of IGST, all imports of services made on or after the appointed day will be liable to integrated tax regardless of whether the transactions for such import of services had been initiated before the appointed day.
If tax on import paid under existing law
If the tax on such import of services had been paid in full under the existing law, no tax shall be payable on such import under the IGST Act.
If partial tax on import under existing law
If the tax on import of services had been paid in part under the existing law, the balance amount of tax shall be payable on such import under the IGST Act.
Let’s discuss section 13 of IGST Act, 2017, because Place of supply of a service shall determine as to whether a service can be termed as import or export of service. The specific provisions relating to the place of supply for international supply of services are as below in a tabular format:
| S.No. | Situation | Place of Supply |
| 1 | Default Rule other than specific situations mentioned below | Location of the recipient of services; If not available, location of the supplier of services. |
| 2 | Services supplied in respect of goods which are required to be made physically available | Location where the services are actually performed |
| Services which require the physical presence of the recipient or the person acting on his behalf with the supplier of services | ||
| 2.1 | Services are provided on goods but from a remote location by way of electronic means | Location where goods are situated at the time of supply of services |
| 2.2 | Above provisions is not applicable in respect of goods which are temporarily imported into India for repairs and are exported after repairs | |
| 3 | Services supplied directly in relation to an immovable property | Place where the immovable property is located or intended to be located |
| 4 | Admission to, or organisation of an event | Place where the event is actually held |
| 4.1 | Above Services provided in more than one country including India | India |
| 4.2 | Above Services provided in more than one state | Proportionate Basis |
| 5 | Services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders | Location of the supplier of services |
| 5.1 | Intermediary services | |
| 5.2 | Services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month | |
| 6 | Transportation of goods, other than by way of mail or courier | Place of destination of such goods |
| 7 | Passenger transportation services | Place where the passenger embarks on the conveyance for a continuous journey |
| 8 | Services provided on board a conveyance | First scheduled point of departure of that conveyance for the journey |
| 9 | Online information and database access or retrieval services (OIDAR) | Location of the recipient of services |
Source:
Integrated Goods and Services Tax Act, 2017
Hope this information will help you in your Professional endeavors. For further assistance/query, feel free to write to us.
Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at [email protected]
Disclaimer:
The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn’t constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.
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