The Central Board of Indirect Taxes and Customs ( CBIC ) has issued clarifications on the Export of Service.
The CBIC has clarified that the supplier of services located in India would be liable to pay integrated tax on reverse charge basis on the import of services on that portion of services which has been provided by the supplier located outside India to the recipient of services located outside India.
The department has also said that, said supplier of services located in India would be eligible for taking input tax credit of the integrated tax so paid.
In a Circular issued by the CBIC has stated that, “even if the full consideration for the services as per the contract value is not received in convertible foreign exchange in India due to the fact that the recipient of services located outside India has directly paid to the supplier of services located outside India (for the outsourced part of the services), that portion of the consideration shall also be treated as receipt of consideration for export of services in terms of section 2(6)(iv) of the IGST Act, provided the:
The department also given illustrations for better understanding.
Subscribe Taxscan Premium to view the Judgment