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Economic Laws Practice, Taxand India
India’s GST framework is set for a landmark shift. The Government has clarified that intermediary services provided in cross-border transactions will now be treated as exports – ending years of uncertainty and denying Indian providers export benefits.
At present, GST law deems the place of supply for intermediary services as the provider’s location in India, making them taxable domestically and ineligible for zero-rating. This position mirrored the earlier Service Tax regime.
The proposed change is significant:
At the same time, intermediary services received from abroad will now attract GST under the reverse charge mechanism, raising compliance and cost considerations for Indian businesses.
Stella Joseph and Yash K Desai from our Indian member firm, Economic Laws Practice, have analysed this development in a recent article “Ending the Tax Tussle: Export recognition for Intermediary Services under GST” published in Bar and Bench, which can be read here.
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