Proposed GST changes aim to make India’s services exports more competitive | Industry News

The GST Council is also proposing changes to work done in India on goods belonging to a foreign client. It will also look into payments. “A clarification will be issued on when export payment counts as received, and by when it must arrive. It will follow the Reserve Bank’s own rules, so that one standard applies rather than two.” Importantly, the document also says that these changes will not be restricted to the IT services segment but will apply to a wider export segment, such as design studios, testing laboratories, medical transcription, etc.

According to industry players, if the changes are approved, this would give an impetus to IT services players and reduce tax litigation. “At present thousands of crore are stuck in refund claims,” said an industry executive on condition of anonymity. One instance of such a demand was when India’s second-largest IT services player, Infosys, was served a notice by the Directorate General of GST Intelligence for ₹32,403 crore. There are several such examples.