## RCM on Import of Services (IGST)

### The Entry

Services supplied by any person located in a non-taxable territory to any person other than a non-taxable online recipient located in the taxable territory → RCM (IGST only).

### Key Concepts

Non-taxable territory: Territory outside India for GST purposes.
Recipient pays IGST under RCM (it is an import of service).
This entry covers virtually all imports of services into India by businesses.

### Exception: Non-Taxable Online Recipient

If the recipient is a non-taxable online recipient (e.g., individual consumer receiving OIDAR services), the supplier (foreign service provider) has to register and pay tax under FCM in India - not RCM.

### Why IGST?

Import of services is always treated as inter-state supply, hence IGST is the applicable tax.

Worked example

### Example 1

Example: An Indian company receives consultancy services from a UK consultant (no permanent establishment in India) for ₹ 10 lacs.

→ RCM under IGST payable by the Indian company on ₹ 10 lacs.

### Example 2

Example: An individual in India subscribes to Netflix (OIDAR service from a foreign provider).

→ Individual is a non-taxable online recipient - foreign provider must register and pay IGST under FCM. RCM does NOT apply on the individual.

⚠️ Common exam mistakes

Charging CGST+SGST on imports - imports are always IGST
Forgetting that OIDAR services to individual consumers are NOT under RCM - they follow special provisions
Not paying tax on free imports of services with consideration in non-monetary form

Bare-Act text Entry 1 of Notification 10/2017-IT(R) · Notification No. 10/2017-IT(R) dated 28.06.2017 · click to expand

Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient - integrated tax shall be paid on reverse charge basis by the recipient of such service.

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RCM - Import of Services from Non-Taxable Territory

Worked example

⚠️ Common exam mistakes