Purchase of Services for Overseas Place of Supply from Registered Vendor
The supply of goods or services or both when the supplier is located in India and the place of supply is outside India shall be treated to be a supply of goods or services or both in the course of inter-state trade or commerce.
The process of computing tax on purchase from vendor with overseas place of supply has been explained in this document.
Create a purchase invoice
- Choose the
icon, enter Purchase Invoice, and then choose the related link. - Select Vendor on Purchase Invoice header, GST vendor type should be Registered.
- Select G/L Account on Purchase Invoice line. GST Group Code, HSN/SAC Code and GST Credit value should be selected as Availment if the tax input credit is available or else Non-Availment on the G/L Account.
- GST Credit option can be changed on Purchase Invoice line.
For example, the service recipient has a GSTIN in West Bengal and the Vendor also has a GSTIN for West Bengal, but service provider and place of supply is outside India. In this case, IGST will be charged as place of supply is outside India. So, invoice will be issued for INR 10,000 on which 18% IGST, has to be charged.
GST calculation will appear in the Fact Box, as following:
Component Amount GST Base Amount 10,000 IGST 1800 GL Entries for purchase of services for overseas place of supply from registered vendor where input tax credit is available, will be as following:
Particulars Amount Services Account 10000 IGST Receivable Account 1800 Vendor Account -11800 GL Entries for purchase of services for overseas place of supply from registered vendor where input tax credit is not available, will be as following:
Particulars Amount Services Account 11800 Vendor Account -11800