New RCM for Indian Exporters w.e.f. 01/10/23

The Central Government has notified the New RCM (Reverse Charge Mechanism) for Indian exporters with respect to the export of goods and services.

The Finance Act, 2023 dated 31-03-2023 w.e.f. 01-10-2023 had omitted sub-section (9) of Section 13 of the IGST Act, 2017.

The Section reads as:

13(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.

As an effect of which:

The Place of Supply (POS) of services of transportation of goods, other than by way of mail or courier, shall no longer be the place of destination of such goods.

Now, the POS would be “the location of the recipient of services”, in terms of Section 13(2) of the said Act.

Section 13(2) reads as:

13(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:

Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

Therefore, if an Indian exporter, export goods through a foreign shipping line, now, w.e.f. 01-10-2023 the POS would be the location of the Indian Exporter and accordingly, RCM would be applicable on the said transaction.