GST Applicability on Foreign Diplomatic Mission (FDM)

FDM (Foreign Diplomatic Mission)

FDM (Foreign Diplomatic Mission) is a group of people from an organisation of a country located in other countries. (i.e. embassies, UN Agencies, UN offices, consulates, etc.) FDMs are under the jurisdiction of the country in which they are established, however such FDMs are protected by United Nations (Privileges and Immunities) [UNPI] Act, 1947, except in rare countries like North Korea.

In the same way FDMs established in India are under Jurisdiction of Indian Government. Same laws, rules and regulations are applicable to them as applicable to any other person or organisation in India. But then, they are given few exemptions, immunities, privileges considering UNPI Act, 1947.

Possible Problem of FDM under GST

However, PAN (Permanent Account Number) as per Income Tax Act, 1961 is not allotted to them because FDMs are not Indian Residents ordinarily or non-ordinarily.

As per Section 25(9) of CGST Act, 2017 says that “government will allot UIN (Unique Identification Number) in such few special cases, rather than GSTIN (Goods and Services Tax Identification number)”

GSTIN and UIN are two different types of identification numbers under GST. Goods and Services Tax Identification Number (GSTIN) is allotted to regular taxpayers who are required to collect GST and file GST returns  UIN is allotted to only the below-mentioned organization.

Who can apply for UIN under GST?

The following organizations can apply for a UIN:

  • A specialized agency of the United Nations Organization
  • A Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947,
  • Consulate or Embassy of foreign countries
  • Any other person or class of persons as notified by the Commissioner
 What is the purpose of a UIN?

The organization listed above will be granted a Unique Identification Number (UIN). This allows the body to receive tax refund on inward supplies of goods and services (purchases).

GST Applicability and Rates

As per CGST Act, 2017, there is no GST payable on Services by a foreign diplomatic mission located in India.

However, GST is payable on some specified goods at 5%, 12%, 18%, 28% as the case may be, but GST on extremely essential goods for FDMs is exempt.

Input Tax Credit 

Yes, the ITC will be credited to them. But they cannot utilize ITC anywhere as they are not supplying anything.

What is the last day for claiming a refund on purchases by a UIN holder?

GST Council said “that FDMs shall be given full refund of taxes for underlying value of their Input Tax Credit in Procedure and Manner as may be prescribed” vide circular number 68/2018 issued on 5th October, 2018.

As mentioned before, refunds can be claimed only through GSTR-11. The return must be filed within 6 months from the last day of the quarter in which supply was received. Beyond the 6 month deadline, the refund will lapse.

For example, consider a UIN holder that received purchases on 10th October 2017.

  • The last day of the quarter of receiving the supplies is 31st December 2017.
  • The deadline to claim the refund is 6 months from then, 30th June 2018.
How to register as a UIN?

The organization must apply for UIN using FORM GST REG- 13. If the proper officer is satisfied, he will assign a UIN and issue a certificate in FORM GST REG-06 within 3 working days from the date of the submission of the application. Here’s a format of FORM GST REG- 13

What returns should be filed by a UIN holder?

Every UIN holder must file GSTR-11 by 28th of next month in order to claim refund of the taxes paid on his inward supplies. GSTR-11 will contain details of such supplies of taxable goods and/or services. GSTR-11 will contain details of such supplies of taxable goods and/or services. A UIN holder will not be allowed to add or modify any details in GSTR-11. The Information will be auto-populated information from seller’s GSTR-1 (sales).

What should a seller supplying to a UIN holder ensure?

The taxable supplier (normal registered taxpayer under GST) while supplying to a UIN organization must:

  • Mention the UIN on the invoices
  • Treat such sales as supplies to another registered person (B2B)

Invoices should be uploaded in the same manner as for normal B2B sales.