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Nasscom Seeks GST Clarity on Overseas Branch Services and R&D Ahead of Council Meeting
M
Moneycontrol•07-10-2026, 07:34
Nasscom Seeks GST Clarity on Overseas Branch Services and R&D Ahead of Council Meeting
- •IT-ITES industry body Nasscom has urged the GST authorities for clarity on the GST treatment of services delivered through overseas branches and R&D on customer-provided prototypes.
- •Nasscom submitted fresh representations ahead of the GST Council meeting scheduled for October 8, highlighting ongoing challenges for international head office-branch transactions.
- •The current framework creates disparities by denying export status to services supplied to unincorporated overseas branches, leading to input tax credit reversals and litigation.
- •Nasscom also addressed R&D and engineering services performed on customer-provided prototypes in India, arguing they should qualify as exports since the results are used abroad.
Key Questions Answered
Nasscom has requested clarity on the GST treatment of services provided through overseas branches and research and development carried out in India on customer-provided prototypes.
The current framework creates a disadvantage for services exported through unincorporated overseas branches compared to separate subsidiaries, resulting in input tax credit reversals and extra compliance burdens.
Current rules typically treat R&D and engineering work done in India on customer-provided samples as being supplied locally and deny it export treatment, even though the final results are received and utilized abroad.
