CBIC withdraws GST circular on ITeS

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The Central Board of Indirect Taxes and Customs (CBIC) has withdrawn a circular which created confusion on whether IT service providers can be qualified as intermediaries based on self-assessment under the goods and services tax (GST).

In view of these apprehensions and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board (CBIC),…hereby withdraws, ab-initio, Circular No. 107/26/2019-GST dated 18.07.2019,” an official notification said.

The government earlier in the year issued a circular on the scope of information technology-enabled services (ITeS) and coverage under intermediary services.

Months after putting India’s business process outsourcing industry in a quandary, the government has withdrawn the circular that said anyone engaged in the facilitation of supply of goods/services will not be considered to be engaged in export and will now be considered as intermediary, unless it is on his own account

With this circular most BPO-KPO services were being treated as intermediaries under GST rules and could be taxed under GST. This meant GST authorities were denying any MNC BPOs