Export of services: Settled, yet unsettled

all Law.

This podcast addresses uncertainties in tax laws, particularly regarding the interpretation of legal provisions and the ensuing litigation. It focuses on the tax implications of exporting services, treated as tax-free or zero-rated under GST laws. The Export of Services Rules, 2005, have been subject to frequent amendments and litigations due to the interpretational challenges posed by the "used outside India" condition. The podcast highlights a recent decision in Arcelor Mittal Stainless India Private Limited vs. CST, Mumbai-II, 2023-VIL-516-CESTAT-MUM-ST where the Larger Bench of CESTAT ruled in favor of exporters. It held that providing Business Auxiliary Services to recipients outside India, with consideration received in convertible foreign exchange, qualifies as an export of service. The Tribunal clarified the term "service recipient" and determined that the location of the service recipient being outside India is crucial for fulfilling the export condition. The impact of this decision on the GST regime and its implications for businesses engaged in cross-border transactions remains to be seen, as it may influence the interpretation of GST provisions as well.
Link: Export of services: Settled, yet unsettled | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)

Source: An article published on the LKS website in June 2023
Authors: Shrishti Agarwal, Disha Jain, and Narendra Singhvi
Voice: Ananya Raghavendra and Saundarya Sinha