GST · 26 June 2026
Do You Owe GST on Zoom, Figma, or Google Workspace?
When a GST-registered business in India buys a service from a foreign supplier, such as Zoom, Figma, Google Workspace, or an overseas consultant, that purchase is an import of services under Section 2(11) of the IGST Act. The foreign supplier charges no Indian GST, so Section 5(3) of the IGST Act and Notification 10/2017-IGST(Rate) move the tax to the buyer under the reverse charge mechanism. The recipient pays IGST (18% on most digital and professional services) in cash from the electronic cash ledger, raises a self-invoice under Section 31(3)(f), and can then claim that IGST back as input tax credit if the service is otherwise eligible. The liability sits with the Indian buyer, so an unbilled foreign-software subscription is a common reverse-charge gap at audit.
By Mrs. Swapna Patel
Last reviewed
26 June 2026
In this section
Answers
- Do You Owe GST on Zoom, Figma, or Google Workspace?
- What Is GSTR-1, the GST Return of Outward Supplies?
- What Is GSTR-3B, the Monthly GST Summary Return?
- What Is the Time of Supply Under GST, and When Does Tax Become Due?
- Advance Receipt Under GST: When Do You Issue a Receipt Voucher?
- Credit Note vs Debit Note Under GST: When Do You Issue Each?
- What Is GSTR-2B, and Why Does It Now Decide Your Input Tax Credit?
- What Is the Value of Supply Under Section 15 of the CGST Act?
- What Are the GST Rate Slabs in India After the GST 2.0 Reform?
- Exempt vs Nil-Rated vs Zero-Rated Supply: What Is the Difference?
Foreign software has no Indian GST, so a Zoom or Figma subscription is a GST-free expense.
Under Section 5(3) of the IGST Act and Notification 10/2017-IGST(R), a GST-registered business that imports a service pays IGST itself under reverse charge.
Do I owe GST on Zoom, Figma, or Google Workspace?
Short answer
Yes, if you are a GST-registered business. Under Section 5(3) of the IGST Act, buying a service from a foreign supplier is an import of services, and you pay IGST on it yourself under reverse charge.
The foreign vendor does not register for or charge Indian GST, so the tax does not disappear, it moves to you. This is the same reverse-charge logic that applies to a goods transport agency or an advocate, applied to inter-state and imported supplies. For the term itself, see what the reverse charge mechanism is.
- Common triggers: SaaS subscriptions (Zoom, Figma, Canva, Adobe), cloud hosting, overseas consultants, and foreign ad platforms.
- The rate is the IGST rate for that service, 18% on most digital and professional services; verify the current rate for your specific service against the CBIC schedule, as slabs change.
- Why it matters: the unpaid-tax default is yours, not the vendor's, so a missed subscription becomes your interest and penalty at audit.
What is "import of services" under GST?
Short answer
Per Section 2(11) of the IGST Act, a supply is an import of services when the supplier is outside India, the recipient is in India, and the place of supply is in India, the mirror image of the export test.
- Supplier located outside India.
- Recipient located in India.
- Place of supply in India (for most services, the recipient's location).
- Meet all three and the purchase is an import of services, taxable under reverse charge, even though no Indian tax appeared on the vendor's invoice.
How do you pay and reclaim RCM on foreign software?
Short answer
Pay the IGST in cash through the electronic cash ledger (Section 49(4) bars using existing credit), raise a self-invoice under Section 31(3)(f), then claim the tax back as input tax credit if the service is eligible.
- Pay in cash: RCM cannot be set off against accumulated input tax credit; it is a real cash outflow in the month of the expense.
- Self-invoice: the foreign vendor issues no GST invoice, so you raise your own under Section 31(3)(f) to support the credit.
- Then reclaim: the IGST paid becomes input tax credit under Section 16, unless the service is blocked under Section 17(5).
- Report it in GSTR-3B in the same period, both as a liability and as the credit claim.
Does a freelancer below ₹20 lakh still owe it?
Short answer
A freelancer who is not GST-registered and buys foreign software as a final consumer generally does not self-account for RCM; the obligation bites once you are registered, or where the overseas supplier of an online service must itself register under the OIDAR rules.
- If you are registered (voluntarily or because you crossed the registration threshold), the reverse charge on imported services applies to you.
- For a purely personal, unregistered consumer of an online service, the foreign supplier is the one required to register and pay under the OIDAR regime, not you.
- Why it matters: registering for GST to issue a pakka bill to your own clients also switches on your reverse-charge duty on the foreign tools you use.
- For which domestic supplies trigger RCM for a small business, see GST reverse charge for a small business.
References & related
Primary sources
- Section 5(3), Integrated Goods and Services Tax Act 2017 — India CodeReverse charge on inter-state and imported supplies; the recipient pays the IGST.
- Section 2(11), IGST Act 2017 (import of services) — India CodeSupplier outside India, recipient in India, place of supply in India.
- Notification 10/2017-Integrated Tax (Rate) — CBICImport of services notified for reverse charge in the hands of the recipient.
- Section 31(3)(f) and Section 49(4), CGST Act 2017 — CBICSelf-invoice on the inward RCM supply; the tax is paid from the electronic cash ledger.
Last reviewed: 26 June 2026