1 hr ago
GST Council Eases Export Rules, Speeding Refunds for IT Firms
The GST Council approved changes to rules for services sold to customers in other countries.
Indian companies may be able to claim export benefits when their overseas branches help serve those customers.
Work done in India on goods owned by foreign customers may also count as an exported service, even if the goods remain here.
This includes testing, repairs, certification, research and processing.
The changes could help IT companies and research centres.
The Council also aligned payment rules with Reserve Bank of India rules.
It approved input tax credit for employee health and life insurance costs.
The measures are intended to make refunds and compliance easier for service exporters.
The GST Council approved export-rule changes intended to simplify refunds and reduce compliance disputes for Indian service businesses.
Services delivered to overseas customers through an Indian company’s foreign branch may qualify for export benefits, subject to applicable conditions.
Testing, repairs, certification, research and processing in India on foreign-owned goods may count as exported services even if the goods stay in India.
The changes could benefit IT exporters such as Tata Consultancy Services, Infosys and Wipro, as well as research-focused global capability centres.
The Council also aligned export-payment recognition with Reserve Bank of India rules and approved input tax credit on employee health and life insurance costs.
- Who
- The GST Council approved the changes; Indian IT exporters, consulting firms and global capability centres could benefit.
- What
- It changed export eligibility and payment rules, and approved input tax credit on employee health and life insurance expenditure.
- Where
- India, including services supplied to overseas customers and work performed in India on foreign-owned goods.
- When
- Thursday; the article does not specify a date.
- Why
- To simplify tax refunds, reduce compliance disputes and tax uncertainty, and ease costs for Indian service exporters.
Key facts
- Decision-maker
- Goods and Services Tax Council
- Export services
- Services through Indian companies’ overseas branches may qualify for export benefits, subject to applicable conditions.
- Foreign-owned goods
- Specified work performed in India may qualify as an exported service even when the goods remain in India.
- Activities covered
- Testing, repairs, certification, research and processing
- Payment recognition
- Aligned with Reserve Bank of India rules
- Input tax credit
- Approved for employee health and life insurance expenditure
- Companies named
- Tata Consultancy Services, Infosys and Wipro
Sources
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