The industry body says proposed changes covering overseas branches, research services, refunds and input tax credit could reduce disputes and ease working-capital pressures.
Nasscom has welcomed the GST Council’s latest recommendations, saying they address several long-running tax issues for India’s technology and services sector, including export treatment, input tax credit, refunds and compliance. In a statement on Thursday, the industry body said the changes point to a more balanced approach to enforcement, particularly on notices, prosecution and arrest powers.
The most significant relief, Nasscom said, concerns services delivered through overseas branches. Under the current framework, work carried out by an Indian office for its own branch abroad can fail to qualify as an export because both entities are treated as the same person. The council’s recommendation to remove that barrier could cut uncertainty, reduce disputes and ease the working-capital burden on companies that regularly serve clients overseas through branch structures.
Nasscom also backed the proposed shift in place-of-supply rules for research, testing, certification and engineering services carried out in India on goods owned by foreign customers. At present, the physical presence of a prototype or sample in India can prevent such work from being treated as an export. The association said the change would be particularly helpful for engineering research and development firms, global capability centres and deep-tech start-ups, while also making India a more attractive destination for international research and engineering mandates.
The trade body further supported a simplified registration route for smaller e-commerce sellers using platform warehouses in other states, saying it would make it easier for small businesses to sell across state lines without building their own premises everywhere. It also welcomed proposals to extend inverted-duty refunds to input services and to plant and machinery, speed up refund processing and allow input tax credit on employee health and life insurance. Nasscom said those measures would help release tax credit tied up in legitimate business expenses and improve the overall tax environment for the sector.
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