Export of services gets a leg up
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓The government updated GST rules to boost service exports, helping IT and engineering firms.
- ✓Revenue Secretary Arvind Srivastava said, "Basically the approach has been something which is really an export in its character." These changes allow companies to get benefits even when using overseas branches or processing goods within India.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Financial Express
- Reading Speed
- 3 Minute(s)
- Market Focus
- India Economy
The measures seek to align GST rules more closely with the way Indian services are actually delivered in global markets, addressing some of the long-standing difficulties faced by IT and IT-enabled services, engineering and consulting firms, research organisations and other professional service exporters.
"Basically the approach has been something which is really an export in its character, economic or financial. Tax should recognise it," Revenue Secretary Arvind Srivastava said after the council meeting.
Under the changes, an Indian company serving a foreign customer through its own branch abroad will be eligible for export benefits. The existing condition that could prevent such transactions from qualifying as exports is being removed, provided the other export conditions are met. The move is expected to particularly help analytics firms, design studios, engineering consultancies and other businesses that maintain overseas offices to serve local clients.
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