Import of Agricultural Services and the IGST Reverse Charge Exemption

Import of Agricultural Services explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Import of services is taxed in the recipient's hands and carries no threshold — one imported service can force a registration on a farmer with no other GST exposure. But the exemption notification carries the seven limbs of the agriculture entry across to the IGST side, so most genuinely agricultural imports fall away.

Import of services is taxed under reverse charge in the importer's hands, and section 24(iii) requires registration without any threshold. But S. No. 57 of Notification No. 9/2017-Integrated Tax (Rate) reproduces the seven limbs of the agriculture exemption — agricultural operations, farm labour, processes at a farm, renting of agro machinery or vacant land, loading and warehousing of agricultural produce, agricultural extension services, and APMC or commission agent services. So "any service availed from Foreign Service provider for agricultural operations or process carried out at an agricultural farm then in that case, the Agriculturist need not pay RCM under import of services."

Why import of services is the sharp case

Section 2(11) of the IGST Act defines it: the supplier is located outside India, the recipient is located in India, and the place of supply is in India.

And the Handbook sets out why it bypasses the ordinary reliefs:

"The word 'supply' includes import of a service, made for a consideration… and whether or not in the course or furtherance of business. This implies that import of services for a consideration even for personal consumption would qualify as 'supply' and, therefore, would be liable to tax. This would not be subject to the threshold limit for registration, as tax would be payable… on reverse charge basis, requiring the importer of service to compulsorily obtain registration in terms of section 24(iii)."

Two safety valves exist for non-business importers. Entry 10(a) of Notification No. 9/2017-Integrated Tax (Rate) "exempts import of services under entire Chapter 99 from payment of GST" for personal purposes; and for consumer-facing digital services the burden is shifted, "requires the supplier of services located outside India, to obtain registration for the OIDAR (online information and database access and retrieval) services & online gaming services."

Entry 57: the seven limbs, carried into IGST

The entry exempts "Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce" by way of:

• (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;
• (b) supply of farm labour;
• (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging, which do not alter the essential characteristics but make it marketable for the primary market;
• (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;
• (e) loading, unloading, packing, storage or warehousing of agricultural produce;
• (f) agricultural extension services;
• (g) services by any APMC or Board, or by a commission agent for sale or purchase of agricultural produce.

It is the same list as entry 54 of Notification No. 12/2017-CT(Rate), which is the point: an agricultural service does not become taxable merely because it crosses a border. Entry 54 and its nine limbs →

The Handbook's two worked pairs

Exempt — foreign labour on the farm. "Agriculturist comes in collaboration with foreign investor and the foreign investor is providing foreign labor in India to carry out agricultural operations and processes at the farm so as to give a better yield from the farm." — limbs (a), (b) and (c).

Exempt — foreign scientists doing extension work. "the Foreign investor may send scientists in the farm of the Agriculturist who may carry out testing of soils, studying the availability of water, the problems which the farmers may face while growing crops. Thereafter, they may suggest measures like source of procuring seeds, nature of manure to be used, manner of agriculture etc. The said services will fall under the purview of Agricultural Extension Services."

"Agricultural extension" is defined: "application of scientific research and knowledge to agricultural practices through farmer education or training." Both elements matter — it must be scientific knowledge applied, and applied through education or training of the farmer.

Taxable — a foreign inspection of efficiency. "Foreign Investor sending the persons to India for inspection whether processes at farms are taking place in an efficient manner and the manner discussed. The Foreign Investor is holding 25% or more shares in the Agriculturist Company."

Read why this fails. It is oversight for the investor, not agricultural operations for the farm. The shareholding detail is not decorative: at 25% or more the parties may be related persons, so Schedule I, paragraph 2 can make the service taxable even without consideration.

Taxable — a licensing agreement. "Licensing Agreement of the Plant imported from outside India wherein the Agriculturist pays to Foreign Service provider outside India." A licence is not within any of the seven limbs.

The Handbook's own conclusion: "in every case, the Agriculturist will have to analyze whether the services availed from outside India falls under the exemption clause or not, else the same will be liable to RCM."

What follows where the exemption does not apply

Registration is compulsory under section 24(iii) — no threshold, and the section 23 debate does not help, since the liability is on the inward side and Notification No. 5/2017 covers only outward supplies liable to RCM. Section 24 against section 23 →

A self-invoice and a payment voucher are required, the supplier being unregistered — section 31(3)(f) and (g), rule 52.

Time of supply is the earliest of receipt of goods, the date of payment as entered in the books or debited to the bank account, or the day after thirty days from the supplier's invoice; failing all three, the date of entry in the recipient's books.

Tax is payable in cash, and the credit is worthless where the outward supplies are exempt.

And the entry 1 catch-all in Notification No. 10/2017-Integrated Tax (Rate) is what actually charges the tax: "Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient" — supplier anywhere outside India, recipient any person in the taxable territory.

Key takeaways

• Import of services is a supply whether or not in the course of business, and carries no registration threshold — section 24(iii).
• Entry 1 of Notification No. 10/2017-IGST(R) is the charging entry: any service from a non-taxable territory to a person in the taxable territory.
• S. No. 57 of Notification No. 9/2017-IGST(R) exempts the same seven limbs as entry 54 of Notification No. 12/2017-CT(R).
• Foreign farm labour, farm processes and agricultural extension services are exempt on import.
• "Agricultural extension" means scientific research and knowledge applied through farmer education or training.
• Investor oversight and inspection, and plant licensing agreements, are taxable on reverse charge.
• Where the foreign investor holds 25% or more, Schedule I paragraph 2 can make a related-party service taxable without consideration.
• Entry 10(a) of Notification No. 9/2017-IGST(R) exempts import of Chapter 99 services for personal, non-business purposes.

Read next

• RCM on Agricultural Goods: Notification No. 4/2017, Entry by Entry
• Does an Agriculturist Have to Register for RCM? Section 24 Against Section 23
• Agriculture Exemptions: Entries 54 to 58 and "Agricultural Produce"

Disclaimer: Positions stated as on 5 September 2026, based on sections 2(11), 5(3) and 7 of the IGST Act, 2017, sections 7, 12(3), 24(iii) and 31(3) and Schedule I of the CGST Act, 2017, rule 52 of the CGST Rules, 2017, and S. Nos. 10(a) and 57 of Notification No. 9/2017-Integrated Tax (Rate) and entry 1 of Notification No. 10/2017-Integrated Tax (Rate), as reproduced in the ICAI Handbook on Applicability of GST on Agricultural Sector (January 2026, law updated to 31 December 2025).