Why are GCCs in India, touted as the next big thing, in a tax tangle?

The key problem, say tax experts, lies in the classification of GCCS and what they do: while tax authorities look at the share of operational work done in India

India has become a preferred location for many foreign companies to set up their back offices or tech hubs, known as Global Capability Centres (GCCs). These centres handle IT services, finance, customer support, software development, and more — mostly for the parent companies based in the US, Europe, or other regions.

 

At a recent event organised by the Confederation of Indian Industry (CII), Finance Minister Nirmala Sitharaman said, “There are about 1,800 GCCs in India, employing nearly 2.16 million professionals. The CAGR at which it has grown is 11 per cent over the last five years. And this number of