GST & Indirect Tax

GST on Import of Services Under RCM

Finin2min GST Desk·June 2026·9 min readIMPORT OF SERVICES

Foreign vendor invoices for SaaS, consulting, cloud hosting, design, legal or professional services often sit in accounts payable without GST review. If they qualify as import of services, IGST under reverse charge may be payable by the Indian recipient.

Use the Finin2min GST Services Rate Master to apply these points to your figures or facts.

Definition: when is a service imported?

IGST Act Section 2 defines import of services as a supply where the supplier is located outside India, the recipient is located in India and the place of supply is in India. Section 7 treats import of services into India as inter-State supply. Section 5 provides for IGST levy and reverse charge where notified/applicable.

For the connected rule, example or next step, see GST RCM Year-End True-Up for Services and Imports.

AP review checklist

Check	Why it matters	Examples
Supplier outside India	First limb of import definition.	US SaaS vendor, foreign consultant.
Recipient in India	Indian entity receives/uses service.	Indian company, LLP, GSTIN.
Place of supply in India	Completes import-of-service definition.	General rule/specific POS rule.
Associated enterprise payment	Time of supply may differ.	Group company management fee.
ITC eligibility	RCM paid may be creditable if conditions met.	Business-use SaaS, consulting.

For the connected rule, example or next step, see GST on Director Sitting Fees and RCM.

Time of supply under RCM

For services liable under reverse charge, Section 13 contains specific time-of-supply rules. For associated enterprises where the supplier is located outside India, the time of supply can be the date of entry in books or the date of payment, whichever is earlier. This makes month-end AP accrual controls important.

Common mistakes

Assuming no GST because supplier did not charge GST.
Ignoring foreign currency invoices below materiality threshold.
Missing RCM on group-company service charges.
Paying RCM but not reconciling ITC claim.
Not checking place of supply for intermediary, OIDAR or property/event-linked services.

Finin2min publishing checklist before upload

Re-check IGST Section 2, Section 7, Section 5 and CGST Section 13 before upload.
Do not state a GST rate unless rate notification is verified for the service.
Cross-link to SaaS tools, legal services and RCM articles.

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Make this a monthly finance controlKeep a working paper with invoice data, portal data, source law reference and reviewer sign-off for each GST risk area.

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Official References Used

This draft uses official GST law, rules, GST Council, CBIC/GST portal and e-invoice/e-way bill portal sources only. Before publishing, re-check whether any notification, circular, rule text or portal workflow has changed after the draft date.

For the connected rule, example or next step, see GST on Education Services: Exempt vs Taxable Cases: Comparison, Tax Impact and Decision Framework.

Frequently Asked Questions

Is every foreign vendor invoice an import of services? ▼

No. The IGST definition requires supplier outside India, recipient in India and place of supply in India.

Is RCM paid in cash or through ITC? ▼

RCM tax is generally paid in cash first; eligible ITC can be claimed separately subject to conditions.

Why are associated enterprise invoices risky? ▼

Because the time of supply rule can be triggered by book entry or payment, which means year-end accruals may create GST timing exposure.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: GST & Indirect Tax
Official starting point: www.gst.gov.in

Page source links

For the connected rule, example or next step, see GST on Charitable Trust Activities and Donations.