India GST indirect tax FAQs
Updated 11 July 2018
Indian GST – On 01 July 2017, the new tax legislation in India takes effect. Pearson VUE will begin to collect Indian GST on business to consumer (B2C) sales made to candidates sitting tests in India as close to July 1 as possible.
The following services are impacted:
- Candidates who schedule exams or make other purchases through the Pearson VUE Testing System on or after 01 July 2017 will be charged 18% India GST.
- Exam vouchers sold to candidates or a business that is not a registered taxpayer in India on or after 01 July 2017 will be charged 18% India GST.GST will not be charged on sales that are made to businesses in India. It will be the responsibility of the business customer to account for GST under the reverse charge in India where required.
On 1 July 2017 India will introduce Goods and Services Tax (GST). The GST law includes new measures to tax the digital economy in India in line with a number of other countries globally including India and countries in the European Union. Under The Integrated Goods and Services Tax Act, 2017, overseas businesses that supply online information and database access or retrieval services to non-business customers in India will be required to register and charge GST on its sales of these services.
Since Pearson VUE’s (NCS Pearson, Inc.) testing services are predominantly electronic in nature, where they are provided to candidates who are non-business customers, Pearson VUE is required to register and charge GST on its sales of testing services.
Section 14 of the Integrated Goods and Services Tax Act, 2017 states the following:
“14. (1) On supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services
(2) The supplier of online information and database access or retrieval services referred to in sub-section (1) shall, for payment of integrated tax, take a single registration under the Simplified Registration Scheme to be notified by the Government”
Reverse charge GST applies where overseas businesses provide services to Indian businesses who are registered for GST. As a US company, the services that Pearson VUE provides to Indian businesses are subject to the reverse charge.
In simple terms, the reverse charge moves the responsibility for recording GST on a transaction from the overseas business to the Indian customer. This means that instead of Pearson VUE charging Indian GST on its services, the GST is reported by you when you file your GST returns with the tax authorities. You would report both the purchase (input) GST and the supplier's sale (output) GST on your GST return.
- Reverse charge only applies to companies / businesses (not individuals) and only for business to business (B2B) transactions. When the sale is made, the company must provide their GST number (taxpayer ID) to Pearson VUE. This is how the sale is classified as a business to business sale.
- Pearson VUE invoices / receipts show zero (0) VAT and display the amount of tax that is applicable, along with text that the transaction may be subject to reverse charge. The buyer self accounts for the tax when they submit their taxes to the local govt.
Reverse charge provisions will apply if Pearson VUE has a valid GST registration number on file from your Pearson VUE testing centre. Examples of these types of transactions are typically voucher sales or credit card registrations if made at your centre and the form of payment is your business’ credit card. In these cases, VUE will not collect GST on the transaction but will track and report these sales to tax authorities as required by tax authorities.
Pearson VUE is not an established business in India. B2B sales by non-established businesses to established businesses in India are not subject to local GST and as a result reverse charges are applicable and GST needs to be accounted for by the recipient.
Voucher Store Customers
Please send an email to the Pearson VUE Voucher Store with your company name and proof of exemption. Pearson VUE will confirm once the system has been configured for your company to be exempt.
NOTE: Any orders placed prior to your company being marked as exempt will be subject to GST.
Test Center Administrators
No, the test center statement will not change.
When a candidate registers with Pearson VUE’s contact centre or Pearson VUE’s website, Pearson VUE emails the candidate a payment confirmation.
When the candidate registers for an exam with the Test Center AND VUE Credit Terms are used as the payment method, Pearson VUE does not send the candidate a payment receipt. Instead, the test center administrator should do this.
When the candidate registers for an exam with the Test Center AND a credit card is used Pearson VUE emails the candidate a payment confirmation. If the payment was made using a Test Center business credit card, please make sure that the Billing Information is correct on the order payment screen. The default can be to the candidates address, but can be changed as needed.