# Importation of Services [Para 4 of Schedule I]

## The Rule

Import of services by a person:

From a related person, OR
From his own establishments located outside India,

…without consideration, made in the course or furtherance of business, shall be treated as supply.

## Key Conditions

1. Must be import of services (not goods).

2. Must be from a related person OR own foreign establishment.

3. Must be in the course or furtherance of business.

4. The 'without consideration' element is what triggers Para 4 (paid imports are anyway taxable under regular charging provisions).

## Why This Matters

In the absence of Para 4, free intra-group services (e.g., from a foreign head office to its Indian subsidiary) would escape GST. Para 4 plugs that gap.

Worked example

### Example 1

Example 1 (Supply): Jhumroo Associates receives free legal services from its Malaysian head office. Since the foreign HO and Indian establishment are deemed distinct persons and the service is received in the course of business → Treated as supply even though no consideration is paid.

### Example 2

Example 2 (Not Supply): Chakmak receives architect services free of cost from his son in the US for his personal house. Although son is a related person, the service is NOT in the course or furtherance of business → Not a supply.

### Example 3

Example 3 (Supply): Same Chakmak receives architect services free of cost from his son for his office building → in course of business → Treated as supply under Para 4.

⚠️ Common exam mistakes

Forgetting the 'course or furtherance of business' filter — purely personal imports from relatives are not Para 4 supplies.
Applying Para 4 to goods — Para 4 covers SERVICES only (free import of goods is dealt with under customs/IGST on import of goods).
Confusing 'related person' under Section 15 with 'family' under Section 2(49); Para 4 uses the broader 'related person' definition.

Bare-Act text Schedule I, Para 4 · CGST Act, 2017 · click to expand

Schedule I, Para 4 – Import of services by a person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

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Importation of Services without Consideration [Para 4 of Schedule I]

Worked example

⚠️ Common exam mistakes