GST Implication on App Developers Situated Outside India

Mobile applications have become an integral part of businesses today. With the development of new-age technology, app developers can create unique apps that can help businesses with their operations. However, app developers situated outside India need to understand the impact of the Goods and Services Tax (GST) on their operations in India. In this article, we will explore the implications of GST on app developers situated outside India and how they can comply with the tax regulations in India.

Understanding GST

GST is a tax reform that was implemented in India on 1st July 2017. It is a value-added tax levied on the supply of goods and services across India. GST aims to create a unified market for businesses in India by eliminating multiple indirect taxes that were previously levied by the central and state governments. GST has been implemented to simplify the tax structure in India, promote ease of doing business and make India a preferred destination for foreign investors.

GST Implications on App Developers Situated Outside India

App developers situated outside India who provide services to Indian businesses need to understand the implications of GST on their operations. According to the GST regulations, app developers situated outside India who provide services to businesses in India need to register for GST if their aggregate turnover in India exceeds INR 20 lakhs. The aggregate turnover includes all the revenue generated from the supply of goods and services in India.

App developers who are registered under GST are required to file monthly or quarterly returns, depending on their turnover. They need to mention the GSTIN (GST Identification Number) on their invoices, which is a unique number assigned by the government of India to businesses that are registered under GST. App developers need to maintain proper records of their transactions and invoices to comply with the GST regulations in India.

Applicable GST Rates

The GST rates for the supply of services by app developers situated outside India to businesses in India are as follows:

18% for the supply of software development services, including mobile app development
18% for the supply of maintenance and support services for mobile applications
18% for the supply of customisation services for mobile applications

Steps for App Developers Situated Outside India to Comply with GST Regulations

The following are the steps that app developers situated outside India can follow to comply with the GST regulations in India:

Registration for GST - App developers situated outside India who provide services to businesses in India need to register for GST if their aggregate turnover in India exceeds INR 20 lakhs. They can register online by submitting the necessary documents.
Obtaining GSTIN - After registering for GST, app developers will be assigned a unique GSTIN. This number needs to be mentioned on all invoices issued by the app developers for their services.
Invoice Generation - App developers need to generate invoices for the services provided to businesses in India. The invoices need to mention the GSTIN of the app developer and the business to which the services are provided.
Maintenance of Records - App developers need to maintain proper records of their transactions and invoices. They need to keep a record of all the services provided to businesses in India, the GST charged, and the GST paid.
Filing of Returns - App developers need to file monthly or quarterly returns, depending on their turnover. They need to file GSTR-1, GSTR-2 and GSTR-3 returns on the GST portal.

Conclusion

GST has simplified the tax structure in India, and it is important for app developers situated outside India to comply with the GST regulations if they provide services to businesses in India. App developers need to register for GST if their aggregate turnover in India exceeds INR 20 lakhs, and they need to maintain proper records of their transactions and invoices. By complying with the GST regulations, app developers can avoid penalties and legal actions and continue to provide their services to businesses in India.