GST Compliance for Foreign Companies in India
GST compliance for foreign companies in India is a critical legal requirement for overseas businesses supplying goods or services in the Indian market. Foreign entities operating through subsidiaries, branch offices, liaison offices, or as non-resident taxable persons (NRTP) must comply with Indian GST laws from day one.
With strict enforcement and automated data tracking, non-compliance can result in penalties, blocked operations, and denial of Input Tax Credit (ITC).
Who Is Required to Comply with GST in India?
GST registration is mandatory for foreign companies in India if they:
- Supply goods or services in India
- Operate through a subsidiary, branch, or project office
- Provide digital or online services to Indian customers
- Act as a Non-Resident Taxable Person (NRTP)
- Import goods or services into India
There is no basic exemption threshold for non-resident taxable persons.
GST Registration for Foreign Companies
Foreign companies must obtain GST registration before commencing taxable activities.
Key Registration Requirements:
- PAN (for Indian entity) or passport-based registration (for NRTP)
- Authorized signatory in India
- Valid Indian address for business operations
- Advance tax deposit (for NRTP registrations)
GST registration is typically granted on a temporary basis for NRTPs and requires periodic renewal.
GST Compliance Requirements for Foreign Companies
1. GST-Compliant Invoicing
Foreign companies must issue invoices in accordance with Indian GST laws, including:
- Correct HSN/SAC classification
- Applicable GST rates
- Place of supply rules (critical for cross-border services)
- Mention of reverse charge where applicable
Errors in invoicing often lead to ITC denial for Indian customers, impacting business credibility.
2. Input Tax Credit (ITC) for Foreign Companies
Foreign companies operating in India can claim ITC subject to compliance.
Key ITC conditions include:
- Reflection of invoices in GSTR-2B
- Timely filing of GST returns
- Payment to vendors within 180 days
- Exclusion of blocked credits under GST law
NRTPs are generally restricted from claiming ITC except in limited cases.
3. Filing of GST Returns
Foreign companies must file GST returns as per their registration type.
Common returns include:
- GSTR-1 – Outward supplies
- GSTR-3B – Monthly tax payment
- GSTR-5 – For Non-Resident Taxable Persons
- GSTR-9 – Annual return (where applicable)
Late filing may result in interest, penalties, and operational disruptions.
4. GST on Import & Export Transactions
Foreign companies must comply with GST on:
- Import of goods (IGST at customs clearance)
- Import of services (reverse charge mechanism)
- Export of goods and services (LUT or IGST refund mechanism)
Proper structuring is essential to avoid tax leakage and refund delays.
5. E-Way Bill Compliance
If goods are transported within India, e-way bill compliance is mandatory.
Foreign companies must ensure:
- Accurate invoice value and tax details
- Consistency between GST returns and logistics documents
- Compliance to avoid detention and penalties
6. GST Audit, Notices & Litigation
Foreign companies are frequently scrutinized due to cross-border transactions.
Best practices include:
- Periodic GST compliance review
- Maintenance of reconciled records
- Timely response to GST notices
- Professional representation in audits and appeals
Why GST Compliance Is Critical for Foreign Companies in India
Effective GST compliance helps foreign businesses:
- Avoid penalties and legal exposure
- Ensure smooth operations in India
- Maintain credibility with Indian customers and vendors
- Optimize tax costs and cash flow
Professional GST Advisory for Foreign Companies
GST law in India is complex, particularly for cross-border and international transactions. Professional advisory ensures correct structuring, full compliance, and risk mitigation.
Our GST services for foreign companies include:
- GST registration and advisory
- End-to-end return filing
- ITC reconciliation and optimization
- GST on imports, exports, and cross-border services
- Audit, assessment, and litigation support
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