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
- [!INCLUDE [open-search](../../includes/open-search.md)] Purchase Invoices, and then choose the related link.
- Select Vendor on Purchase Invoice 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 invoice line. Check GST Group Code and HSN/SAC Code. Set GST Credit to Availment or Non-Availment, as appropriate.
- GST Credit option can be changed on Purchase Invoice 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 example uses an invoice 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 purchase 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 purchase 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