Nasscom hails GST Council's clarification on 'intermediary services'

Nasscom said the GST Council's clarification will ensure that BPM exports/R&D exports and IT services-related exports are no longer denied the export status by the enforcement authorities.

Nasscom on Saturday said the GST Council's clarification on scope of intermediary services will ensure that BPM exports/R&D exports and IT services-related exports are no longer denied the export status by the enforcement authorities.

On Friday, GST Council's recommendations included issuance of certain circulars to remove ambiguity and legal disputes on various issues. This included clarification on scope of "intermediary services" and clarification relating to interpretation of the term "merely establishment of distinct person" with reference to a section of the IGST Act 2017 for export of services.

"Nasscom welcomes the decision of the GST Council to issue a circular to clarify the scope of intermediary services. We expect this to lay at rest a long pending issue for the BPM industry and ensure that BPM exports/R&D exports and IT services related exports will no longer be denied the export status by the enforcement authorities," Nasscom said in a statement.

Nasscom also welcomed the decision of the Council to clarify that subsidiaries or group companies (companies incorporated in India) will be treated as separate entities and be eligible for export status for exports to their foreign parent companies/group companies.

"This will settle the cloud of uncertainty for the GCC centres in India," it noted.

Nasscom said it has been advocating this issue for the last 2-3 years.

"The Council's decision will provide a great impetus for the industry, and we will look at the finer details of the circular and hope there is no ambiguity," it added.