Purchase Return of Services for Overseas Place of Supply to 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 return to a vendor with overseas place of supply has been explained in this document.
Create a purchase return order or purchase credit memo
- Choose the
icon, enter Purchase Return Order or Purchase Credit Memo, and then choose the related link. - Select Vendor on Purchase Credit Memo header, GST vendor type should be Registered.
- Select G/L Account on Purchase Credit Memo 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 in the G/L Account.
- GST Credit option can be changed on Purchase Credit Memo line.
For example, if a service recipient has a GSTIN for West Bengal and the Vendor has a GSTIN in West Bengal, but the place of supply is outside India. In this case, IGST will be charged as place of supply is outside India. So, return order or credit memo 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 Return or Credit Note of services for overseas place of supply from registered vendor where input tax credit is available, will be as following:
Particulars Amount Services Account 11800 IGST Receivable Account -1800 Vendor Account -10000 GL Entries for Return or Credit Note 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