Stories
GST Council To Consider Easing Export Rules For Services And Overseas Branches
- •The GST Council is likely to consider a wider definition of export of services, allowing Indian firms to retain export status when billing foreign clients through overseas branches.
- •Testing, repair, certification, and research performed in India on goods belonging to foreign clients may qualify as exports even if the goods remain in India.
- •The proposed changes aim to address tax challenges faced by India service exporters and global capability centres.
- •The government is proposing to simplify rules governing the receipt of export payments to align with Reserve Bank rules.
- •The refund framework is proposed to be expanded to cover services and equipment where service exporters incur operational costs.
Key Questions Answered
The GST Council is considering a wider definition of service exports to allow Indian firms to retain their export status even when billing foreign clients through overseas branches, removing previous restrictions on supplies between establishments of the same person.
Activities like testing, repair, certification, and research conducted in India for foreign clients will qualify as exports even if the goods remain in India, removing the current 18 percent GST that applies when the place of supply defaults to India.
The government is proposing to streamline export payment rules by aligning with Reserve Bank standards instead of using two different standards, and widen the refund framework to cover services and equipment where service exporters' costs actually arise.
