BPOs, KPOs not intermediary services; exempt from 18% GST, clarifies government

NEW DELHI: The Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) sector has got a big relief from the government after it clarified that the services outsourced to India or carried out in the country for foreign entities will not be treated as intermediary services, and hence not face GST at 18%.

The Central Board of Indirect Taxes and Customs (CBIC) has in a circular clarified that the specific provision of place of supply of ‘intermediary services’ under the IGST Act will be invoked only when the supplier of intermediary services or the recipient of intermediary services is outside India.