- The VAT rules for imported services have been restructured, replacing the previous reverse-charge approach.
- Importers are now responsible for VAT on imported services, while banks act as withholding agents and deposit the VAT through treasury challans.
- The bank will provide the treasury challan copy to the importer, which serves as the VAT invoice (Mushak-6.3).
- Imported services must be reported in VAT returns, shown as output VAT and, if eligible, claimed back as input VAT credit.
- The treasury challan must be submitted in the relevant month’s VAT return.
Source: assets.kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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