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Circular of GST withdrawn. Relief to ITeS Companies!

There was an ongoing matter of lurch of input tax in case of export of services , where there was a fundamental dilemma regarding the Business Process Outsourcing (BPO) services and ITeS as intermediary services and not export of services. The Central Board of Indirect Taxes and Customs (CBIC) has withdrawn that circular that created the confusion. This was in consequence to numerous representations received by the board. “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 I industries were fighting for the benefits of export but the circular issued by the board created a lot of ambiguity. Many notices were issued by the tax officials and onus was on the ITeS firms for proving otherwise. A clarification over the matter is expected in due time .

Author: Niranjan Reddy

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