Relief for back-office firms: Govt withdraws GST circular on intermediary services

In what could be seen as a major relief for corporates, especially multinational companies, the government has decided to withdraw a circular on intermediary services under the GST.

This circular, issued in July, had created a lot of upheaval in the back-office/IT services industry. Substantial GST refunds were also stuck because of this circular, it is said. The withdrawal should come as a relief to IT/ITeS (IT-enabled services) firms and back-office support service providers.

Numerous representations

The Central Board of Indirect Taxes & Custom (CBIC) said in a circular that numerous representations were received expressing apprehensions on the implications of the circular.