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

On 18 September 2021, Nasscom said that the GST Council’s clarification on the 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 17 September 2021, 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 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.