This issue of TaxCognito, which in Latin means 'awareness about tax law', seeks to provide you an insight into significant legal and regulatory developments in taxation that have taken place very recently in India.
Date: 21 September 2021
Significant Clarifications issued by Government on Applicability of GST on Supply of ‘Intermediary’ Services
The Central Board of Indirect Taxes and Customs had issued Circular No. 159/15/2021- GST dated September 20, 2021, incorporating significant clarifications relating to scope of “Intermediary” and its applicability on back-office services supplies.
The Circular has clarified that there is broadly no change in the scope of ‘intermediary services’ in the GST regime vis-à-vis the erstwhile Service Tax regime.
It has been clarified that presence of minimum of three (3) parties is essential for a transaction/supply to be considered to be falling within the scope of supply by an ‘intermediary‘. An activity between only two parties on a principal-to-principal basis can therefore NOT be considered as an intermediary service. Further, an intermediary service provider must have a character of an agent, broker, or any other similar person. For the same reasons, sub-contracting for a service is also not an intermediary service.
As a corollary, the specific provision of ‘place of supply’ of ‘intermediary services’ under section 13 of the IGST Act shall be applicable only when the supplier of intermediary services or the recipient of intermediary services is outside India.
Chambers of Rajan & Indraneel
T: +91 11 41000224, 41030225| Fax:+91 11 29239074
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N 103 Greater Kailash - I, New Delhi - 110048, India.
Chambers of Rajan & Indraneel is a premier full service law firm headquartered at New Delhi, India. The Firm represents amalgamation of vast experiences and practices of two eminent lawyers. Indranil Ghosh is highly reputed as a disputes lawyer. He was a senior partner and head of litigation practice in one of the oldest Indian law firm Fox Mandal for several decades before setting up his own practice. Rajan D Gupta is a rank holder Chartered Accountant turned Corporate Lawyer. He is also a licensed Insolvency Resolution Professional. He has been associated with internationally renowned big law firms in past and has held senior level positions in firms like PwC, Fox Mandal, Khaitan & Co. and SRGR Law, etc. before starting the Firm.
We have a team of experienced Lawyers, Chartered Accountants, Company Secretaries and Insolvency Resolution Professionals with access to network of high quality experienced lawyers in all major commercial cities of India.
The Firm offers a wide range of expert legal services in the areas of corporate and commercial laws and specializes in representing major foreign and domestic corporations with diverse business interests in India. The Firm is professionally equipped to handle large sized and complex corporate transactions like Mergers & Acquisitions, Corporate Restructuring, Joint Ventures, Inbound & Outbound Investments, Private Equity and Venture Capital Investment Transactions, Real Estate Transactions, Infrastructure Projects, Project Finance, Power Projects, Non-Conventional Energy Projects, Highways & Road Projects and Corporate Taxation as well as GST, etc. The Firm also offers proven capabilities in litigation and dispute resolution practice areas, especially in handling international and domestic arbitrations as well as litigation in Supreme Court, various High Courts of India and various judicial and quasi-judicial tribunals/forums including at National Client Law Tribunal, Appellate Tribunals, Tax Tribunals, Competition Commission, Electricity Tribunal, Telecom Disputes Tribunal, Designated Authorities and other adjudicatory bodies.
We have set up a Japan Business Desk (JBD) in order to serve our Japanese clients in a better way. The endeavour of JBD is to act as a bridge between our professionals and clients from Japan so as to ensure that there are no barriers as to linguistic and cultural differences. This will indeed facilitate Japanese corporates doing business in India.
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