Category: IT and ITES

1. Location of the recipient of service is defined in section 2(14) of the IGST Act.
2. A recipient of services is treated as located outside India if his place of business where he receives services is outside India or, if he does not have a place of business, his usual place of residence is outside India .

( FAQ 9: IT/ ITES)

1. Place of supply of IT/ITES services is the location of the recipient in terms of section 12 and 13 of the IGST Act, 2017.
2. However, if the recipient is not registered and his address is not available on the records of the supplier, the place of supply would be the location of the supplier.

( FAQ 8: IT/ITES)

The supply of any service is considered an export of service, where the following conditions are met:
(1) the supplier of service is located in India;
(2) the recipient of service is located outside India;
(3) the place of supply of service is outside India;
(4) the payment for such service has been received by the supplier of
service in convertible foreign exchange; and
(5) the supplier of service and the recipient of service are not
merely establishments of a distinct person in accordance with
explanation 1 of section 8 of the IGST Act, 2017.

(FAQ 7: IT/ITES)

1. Exports and supplies to SEZ units and SEZ developers are zero-rated in GST.
2. Zero-rating effectively means that no tax is payable on exports but the exporter/supplier is entitled to the input tax credit on inputs/input services used in relation to exports.
3. The exporters have two options for zero rating, which are as follows:
   (A) To pay integrated tax on supplies meant to be exported and get
   refund of tax so paid after the supply is exported.
   (B) To make export supplies under a bond or letter of undertaking
   and claim refund of taxes suffered on inputs and input services in
   relation to such exports.

( FAQ 6: IT/ITES)

The rate of GST on IT services is 18%.

( FAQ 5: IT/ITES)

1. If the supplies are made by unregistered suppliers, GST is liable to be paid by the recipient, who is a registered person, undersection 9(4) of the CGST Act, 2017.
2. Therefore, in this case ‘B’ is liable to pay GST on services provided by these individuals.
3. ‘B’ can claim credit of this tax paid by him on reverse charge

( FAQ 4: IT/ITES)

1. Every supplier located in a State or Union territory, whose “aggregate turnover” in a financial year exceeds twenty lakh rupees, is liable to be registered under GST.
2. This limit of turnover for a special category State is ten lakh rupees. ‘A’, whose aggregate turnover is only Rs. 8 lakh in a year, is therefore not liable to registration.

(FAQ 3: IT/ITES)

1. The primary implication is that the place of supply rules applicable to services would apply in determining taxability of the supply of software services.
2. The same would be applicable in situations of supply of services involving a temporary transfer or permitting the use or enjoyment of any intellectual property right.
3. The other implication is that the supplier of software services would not
   be eligible for the composition scheme.

(FAQ 2: IT/ITES )

1. In terms of Schedule II of the CGST Act 2017, development,design, programming, customisation, adaptation, upgradation,enhancement, implementation of information technology software and temporary transfer or permitting the use or enjoyment of any intellectual property right are treated as services.
2. But, if a pre-developed or pre-designed software is supplied in any medium/storage (commonly bought off-the-shelf) or made available through the use of encryption keys, the same is treated as a supply of goods classifiable under heading 8523.

( FAQ 1: IT/ITES)