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The key proposal would change how India determines the place of supply for intermediary services provided to overseas clients. If enacted and brought into force, it could let eligible services use the general rule that places supply where the recipient is located—potentially helping them meet one condition for export treatment. It would not automatically make every service sold to a foreign customer an export.
As of 7 October 2026, the official materials described here establish the GST Council’s recommendation and a Finance Bill 2026 proposal, but do not establish that the amendment had been enacted and commenced. Check the applicable law and commencement notification before relying on the change.
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What the intermediary-services proposal would change
Under section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017, the place of supply for intermediary services is currently assigned to the supplier’s location. The GST Council recommended omitting that clause. Under the proposal, intermediary services would instead fall under section 13(2), the general rule that places supply at the recipient’s location. The Council’s January 2026 newsletter describes the intended result as allowing eligible intermediary services supplied to overseas recipients to be considered under export-related provisions. GST Council, 56th-meeting press material; GST Council newsletter, January 2026
The distinction matters when a service is supplied from India to a customer abroad: a place of supply outside India can help satisfy the export definition. But changing that place-of-supply rule addresses only one part of the test.
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When a service can qualify as an export
The statutory export-of-services definition requires the transaction to satisfy all the applicable conditions, not simply that the customer is foreign. These include:
- The supplier is located in India.
- The recipient is located outside India.
- The place of supply is outside India.
- Payment is received in convertible foreign exchange or in Indian rupees where permitted by law.
- The supplier and recipient are not merely establishments of the same person.
The proposal could affect the place-of-supply condition for qualifying intermediary services. It does not remove the other conditions or establish that any particular contract meets them. CBIC, IGST Act and refund rules
Before and proposed treatment
| Question | Current rule described in the official materials | Proposed treatment |
|---|---|---|
| Place-of-supply rule for intermediary services | Section 13(8)(b) assigns the place of supply to the supplier’s location. | Omit section 13(8)(b) and apply section 13(2), locating supply at the recipient’s location. GST Council press material; Finance Bill 2026 explanatory materials |
| Can the place-of-supply limb of the export definition be met? | A supplier-location result may prevent the place of supply from being outside India when the supplier is in India. | For eligible supplies to overseas recipients, the recipient-location rule may place supply outside India. |
| Other export conditions | Supplier, recipient, payment and establishment conditions apply. | Those conditions remain relevant; the proposal does not waive them. CBIC refund rules |
| Refund and reporting | Subject to applicable zero-rating and refund provisions, definitions and calculation rules. | No automatic refund follows from the proposed place-of-supply change; eligibility and records remain material. CBIC refund rules |
| Legal status and effective date | The materials reviewed describe the special rule as part of the law and the change as a recommendation and proposal. | The Finance Bill materials say most amendments take effect on a date notified alongside corresponding state or union-territory amendments; the reviewed materials do not establish the commencement date. Finance Bill 2026 explanatory materials; GST Council newsletter |
How the proposal fits with other GST measures
The Council’s 56th-meeting materials also set out separate recommendations concerning registration and refunds. They address different taxpayers and processes; they do not expand the export-of-services definition.
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- Eligible low-risk registration applicants: an optional simplified registration route was proposed, with registration intended within three working days under stated conditions. The Council estimated that around 96% of new applicants applying for GST registration could fall within the scheme; that figure refers to registration applicants, not service exporters. GST Council press material; GST Council registration estimate
- Inverted-duty-structure refund claimants: Finance Bill explanatory materials describe a proposal for provisional refunds of 90% of the claimed amount, subject to the applicable conditions. Finance Bill 2026 explanatory materials
- Exporters of low-value goods: the Council recommended removing the threshold limit for refunds arising from exports made with payment of tax, particularly to help small exporters using courier or postal channels. This goods-export measure is not a change to service-export eligibility. GST Council press material; Finance Bill 2026 explanatory materials
What service exporters should understand about refunds
Export treatment and a refund claim are related but distinct questions. CBIC’s refund rules include a formula for refund of unutilized input tax credit on qualifying zero-rated supplies. For services, the rules define export turnover using payments received during the relevant period, services completed during that period for which advance payment was received earlier, and adjustments for advances received on services not completed in the period. CBIC refund rules
Those definitions make the period, service-completion status and payment records relevant to a claim. A change to place of supply by itself does not establish that a supplier qualifies for a refund or determine the amount. Contract terms, invoices, payment evidence and applicable return and refund requirements need to be assessed under the law in force for the relevant period.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to check whether the proposal is in force
- Check the enacted version of the IGST Act to see whether section 13(8)(b) has been omitted.
- Check the applicable commencement notification, including any corresponding state or union-territory amendments, to identify the effective date.
- For a particular supply, apply the law effective on the relevant date and assess every export-of-services condition, not only place of supply.
- Review the applicable zero-rating and refund rules, including the records and period-specific calculations, before treating input tax credit as refundable.
The Finance Bill explanatory materials describe notification-based commencement for most amendments unless a specific date is stated. The official materials reviewed here do not establish whether this proposal had been enacted and commenced by 7 October 2026. Finance Bill 2026 explanatory materials; GST Council newsletter
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