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
- [!INCLUDE [open-search](../../includes/open-search.md)] Purchase Return Orders or Purchase Credit Memos, and then choose the related link.
- Select Vendor on Purchase Credit Memo header, GST vendor type should be Registered.
- In Tax Information, check that GST Invoice is selected and select POS Out Of India. Leave POS as Vendor State cleared.
- Select G/L Account on the credit memo line. Check GST Group Code and HSN/SAC Code. Set GST Credit to Availment or Non-Availment to match the transaction being returned.
- GST Credit option can be changed on Purchase Credit Memo line.
For example, the service recipient and registered vendor both have GSTINs in West Bengal, but the place of supply is outside India. Selecting POS Out Of India sets the GST jurisdiction to interstate. The following return example uses a value of INR 10,000 and an illustrative IGST rate of 18%.
GST calculation appears 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 are as following:
Particulars Amount Services Account -10000 IGST Receivable Account -1800 Vendor Account 11800 GL Entries for Return or Credit Note of services for overseas place of supply from registered vendor where input tax credit isn't available are as following:
Particulars Amount Services Account -11800 Vendor Account 11800