{"id":148,"date":"2020-01-31T05:44:17","date_gmt":"2020-01-31T00:14:17","guid":{"rendered":""},"modified":"2026-09-03T16:47:22","modified_gmt":"2026-09-03T16:47:22","slug":"gst-on-export-services","status":"publish","type":"post","link":"https:\/\/www.legalsalaah.com\/blog\/gst-on-export-services\/","title":{"rendered":"GST on Export of Services to Nepal and Bhutan"},"content":{"rendered":"<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">It is beyond any contradiction that the amendments under the GST laws have been reworked or modified continuously in order to make them more appreciated for various sectors of the economy. These reforms have altogether relieved the burden and complexities of the common taxpayers as well as the tax authorities.\u00a0<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">Before getting into the main topic, let us first understand what export exactly is:<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"5\"><b style=\"\">EXPORTS:<\/b><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">The term\u201cExport of Goods\u201d can only be used when the Goods are physically moved from the home country (India) to a Place outside the home country. Whereas the term \u201cExport of Services\u201d can be used only if the 5 following conditions are fulfilled:<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">1- The service provider should be situated in India.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">2- The recipient of the service should be situated outside of India.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">3- The place where the service is provided is also out of India.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">4- The payment for such service must be paid to the supplier of service in-convertible foreign currency or in Indian rupees level permitted by the Reserve Bank of India.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">5- The supplier of the service and the recipient of the service are not merely establishments of a distinct person in accordance with the explanation 1 in section 8.<\/font><\/div>\n<\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">The 4th condition that states \u2018The payment for such service shall be received by the supplier of service in convertible foreign currency or in Indian rupees level permitted by the reserve Bank of India\u2019 is the condition which is generally not satisfied while supplying to Nepal and Bhutan since Indian currencies are easily accessible in those countries. In Nepal and Bhutan, there can be situations where the payments for the services are received in Indian currency.<br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\"><b style=\"\"><font size=\"5\">#Can it be called an Export?<\/font><\/b><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">An export issued by CBEC says &#8220;Export of services to Nepal or Bhutan fulfils the condition of GST Law regarding taking the services out of India.\u201d But the supplies of services to Nepal and Bhutan with the payment as Indian currency does not satisfy the fundamental conditions of \u2018export of services\u2019 and definition of \u2018export of services\u2019 within the GST Law states that the payment for such services have to be compelled to be received by the supplier of services in convertible exchange currency.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">Such supplies to Nepal and Bhutan are not to be thought of as exports and are conducted on a zero-rated basis. It will be eligible to obtain all the advantages that are offered to zero rated supplies under the GST policy.<\/font><\/div>\n<\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">Although, service supplier would need to bear the <a href=\"https:\/\/www.legalsalaah.com\/gst-registration-online.html\"><b>GST Registration Online<\/b><\/a> and apply for the unique Import Export Code Registration if his intends to supply services to their consumer placed in Nepal or Bhutan, however the same trade will not be thought of as export.<\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><b><i><font face=\"Georgia\" color=\"#330000\" size=\"4\">Notification 42\/2017 on 27th Oct 2017 states that no IGST would be levied on the supply of services from India to Nepal and Bhutan against payment in Indian rupees.<\/font><\/i><\/b><\/div>\n<\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"5\"><b style=\"\">Conclusion<\/b><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\">In case of\u00a0 Nepal &#038; Bhutan, if the payments are received in Indian currency, such services won&#8217;t be treated as exports and no IGST liability is going to be incurred as per the said notification 42\/2017.<\/font><\/div>\n<\/div>\n<div><font face=\"Georgia\" color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font face=\"Georgia\"><\/p>\n<div><font color=\"#330000\" size=\"5\"><b style=\"\">#Where should you go for GST Registration?<\/b><\/font><\/div>\n<div><font color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font color=\"#330000\" size=\"4\">We at <a href=\"https:\/\/www.legalsalaah.com\">LegalSalaah.com<\/a> help you out in the whole process at cheaper rates and speedy solutions so as to make you comfortable.<\/font><\/div>\n<div><font color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font color=\"#330000\" size=\"4\">If you need any further help regarding <b>GST registration online<\/b>, feel free to contact us <b>8766393412.<\/b><br \/><\/font><\/div>\n<div><font color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><font color=\"#330000\" size=\"4\"><br \/><\/font><\/div>\n<div><\/div>\n<p><\/font><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Read in details- Services Supplied to Nepal and Bhutan: Export or Not.<\/p>\n","protected":false},"author":1,"featured_media":349,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-148","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GST on Export of Services to Nepal and Bhutan<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalsalaah.com\/blog\/gst-on-export-services\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GST on Export of Services to Nepal and Bhutan\" \/>\n<meta property=\"og:description\" content=\"Read in 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