Select BPO services won’t be subject to GST: Government

NEW DELHI: The government said select business process outsourcing (BPO) services will qualify as exports and therefore won’t be subject to goods and services tax (GST), marking a substantial relief for the country’s $167 billion IT and ITES (information technology enabled services) sector.

The clarification comes after intense lobbying by the IT industry. The BPO sector was in turmoil since the Appellate Authority for Advance Ruling in Maharashtra held that back-office support services didn’t qualify as “export of service” and were in the nature of arranging or facilitating supply of goods or services between overseas companies and customers. It said these services fell in the category of intermediary services and were liable to 18% GST.