- India’s 57th GST Council recommended removing the rule that disqualifies services supplied between establishments of the same legal person from export treatment under section 2(6) of the IGST Act.
- Under current law and CBIC guidance, services provided by an Indian establishment to its own overseas branch are not treated as exports solely because supplier and recipient are “distinct establishments,” even if the foreign branch uses the services abroad.
- The proposed change is meant to better align GST with cross-border service businesses and help Indian companies supplying services to or through foreign offices.
- If implemented, it could improve input tax credit recovery and reduce export-related refund issues for Indian service exporters.
- The recommendation is not yet law; businesses must continue applying the existing GST rules until statutory amendments take effect.
Source: linkedin.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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