CBIC Circular Clarifies Place of Supply for Data Hosting Services Provided by Indian Companies

• Circular No. 232/26/2024-GST issued by CBIC on September 10, 2024 clarifies place of supply for data hosting services provided by Indian companies to foreign cloud providers
• Concerns raised about whether these services qualify as exports and if they should be classified as intermediary services under IGST Act
• CBIC clarifies that data hosting providers are not intermediaries as they deliver services directly to cloud providers, not customers
• Place of supply for data hosting services determined based on Section 13(2) where recipient is located, which is outside India for foreign cloud providers
• Data hosting services not related to immovable property, so Section 13(4) does not apply
• Indian companies offering data hosting services to foreign cloud providers qualify as exports under GST rules, must meet conditions in Section 2(6) of IGST Act
• Understanding place of supply helps businesses correctly classify services and enjoy export status with tax benefits.

Source: rmpsco.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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