New Delhi, Oct 8 – Nasscom announced that the GST Council’s latest recommendations have resolved long‑standing concerns in the IT and IT‑enabled services sector. The proposals address issues related to service exports, input tax credit, refunds, and compliance, and introduce a more proportionate framework for notices, prosecution and arrest powers.
The association praised the constructive engagement of the Union and State Governments, the Ministry of Finance and CBIC. A key highlight is the removal of the restriction that currently prevents services supplied from an Indian office to its overseas branch from being classified as exports. This change is expected to reduce tax uncertainty, litigation and working‑capital costs for companies that serve international customers through foreign branches.
Other recommendations aim to improve the place‑of‑supply rules for research, testing, certification and engineering services performed in India for overseas customers. By allowing such services to qualify as exports even when the customer’s prototype or sample is physically present in India, the move could benefit engineering R&D firms, global capability centres and deep‑tech start‑ups, and help India attract more global research and engineering mandates. The council also proposes a simplified registration mechanism for smaller e‑commerce sellers using platform warehouses in other states.
Further measures include extending inverted‑duty refunds to input services, expanding refund eligibility to plant and machinery, speeding up refund processing, and permitting input tax credit for employee health and life insurance. These changes are expected to free up legitimate tax credit tied up in business expenditure and improve the overall tax environment for the industry.
