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Microlesson · 5-min read

Importation of Services for Consideration - Section 7(1)(b)

# Section 7(1)(b): Importation of Services

## The Provision

Import of services for a consideration, WHETHER OR NOT in course or furtherance of business, is treated as supply.

## What's Special?

Under Sec 7(1)(a), three conditions are needed (goods/services + consideration + business). Section 7(1)(b) RELAXES one condition — the requirement of 'in the course or furtherance of business' is DROPPED when:

1. Services are being IMPORTED

2. There is consideration

Even a private/personal import of services qualifies as supply.

## Comparison Table

ConditionSec 7(1)(a) DomesticSec 7(1)(b) Imports
Goods or services?BothServices only
Consideration required?YESYES
Must be in course of business?YESNOT REQUIRED
Cross-border elementNot necessaryRequired

## Import of Services WITHOUT Consideration?

  • Sec 7(1)(b) requires consideration → does NOT cover free imports
  • However, Schedule I (Para 4) treats import of services by a person from a related person or from any establishment outside India, in course/furtherance of business, as supply EVEN WITHOUT consideration

## Practical Examples

TransactionSec 7(1)(b) Applies?
Indian individual books foreign online tutor for personal English coaching (paid in USD)YES
Indian company hires US consultant for ₹50 lakhYES
Indian parent receives free advice from foreign related consultancySchedule I Para 4 (no consideration here)
Indian student pays a foreign portal for course accessYES

Worked example

### Example 1

Example 1 – Personal import: Mrs. R, a homemaker, books a tarot card reading with a US-based astrologer for ₹10,000.

  • Import + consideration; business not required
  • Conclusion: Supply; GST on reverse charge basis

### Example 2

Example 2 – Business import: TechCo (India) hires German cybersecurity firm to conduct a security audit for €50,000.

  • Import of service for consideration in course of business
  • Sec 7(1)(b) applies (also Sec 7(1)(a))
  • IGST on reverse charge

### Example 3

Example 3 – Free import from related party: Indian subsidiary receives technical guidance from US parent at no cost.

  • No consideration → Sec 7(1)(b) does NOT apply
  • Schedule I Para 4 applies if in course of business
  • IGST on reverse charge on open-market value

⚠️ Common exam mistakes

  • Requiring 'course of business' for imported services — Sec 7(1)(b) drops this
  • Treating free imports of services from related parties as outside GST — Schedule I Para 4 captures them
  • Applying Sec 7(1)(b) to import of GOODS — covers only services
  • Forgetting that reverse charge typically applies for import of services
Bare-Act text Section 7(1)(b) · CGST Act, 2017 · click to expand
Section 7(1)(b): import of services for a consideration whether or not in the course or furtherance of business.
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