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If Indian GST authorities deny export treatment for services involving an overseas branch, first identify exactly what they issued: a refund objection, a final refund rejection order, or a tax demand or show-cause notice. The document determines your response, forum and deadline. If it is a refund objection in Form GST RFD-08, the refund rules provide 15 days from receipt to reply in Form GST RFD-09. If it is a final order, a first appeal is generally due within three months of communication, subject to a possible one-month extension for sufficient cause. Check the actual document and get Indian GST advice promptly.
Why services between an Indian branch and an overseas branch may not count as exports
Under section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act), a service is an export only if it meets five cumulative conditions:
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- 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 wherever permitted by the Reserve Bank of India.
- The supplier and recipient are not merely establishments of a distinct person under Explanation 1 to section 8.
The fifth condition matters when both sides are establishments of the same legal person. Section 8 treats a person’s Indian establishment and its establishment outside India as distinct persons for purposes of the Act. A person doing business through a branch, agency or representative office in a territory is treated as having an establishment there. As a result, a payment in foreign currency does not by itself make a branch-to-branch service an export. Read the official IGST Act text, including sections 2(6) and 8.
The GST Council’s meeting materials discuss services between an Indian branch and another establishment of the same entity abroad, and distinguish a branch from a separately incorporated subsidiary. Those materials are explanatory; the statute is the controlling text. The GST Council materials should not be read as making every service to a foreign group company automatically ineligible for export treatment.
CBIC gives a banking-specific illustration: certain services by an Indian bank or an Indian branch of a foreign bank to its offshore branch or head office are described as inter-State supplies between distinct establishments, not exports. The example is limited to the banking context; see CBIC’s sectoral FAQ, question 54.
Start by classifying the authority’s communication
Download the complete notice or order, including its attachments, from the portal or the issuing authority. Do not treat an informal portal status as a final order without checking the underlying document.
- Record the form number, issuing authority, tax period, date of issue, date and method of communication, amount involved and relief being sought.
- Identify the specific ground stated. The authority may dispute the distinct-establishment condition, but it may instead challenge the recipient, place of supply, payment, documentation or nature of the service.
- Save the original communication and any portal submission or delivery records so you can establish what was received and when.
What to do with a refund objection or rejection
If you received Form GST RFD-08
Under the CBIC refund rules, when an officer considers a refund claim wholly or partly inadmissible, the officer issues Form GST RFD-08. The applicant is asked to reply in Form GST RFD-09 within 15 days of receiving the notice. The officer considers the reply before making an order, and the rules require a reasonable opportunity to be heard before rejecting a refund application. Check the notice for the response route and particulars, and preserve the filed reply, attachments, submission receipt and hearing record. See the CBIC refund rules.
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Address the objection actually raised, point by point. If the issue is whether the counterparty is the same legal person’s overseas establishment, explain the entity structure with documents rather than relying on a group name or invoice description. If other export conditions are challenged, support those separately; satisfying one condition does not resolve the others.
If you received a final refund rejection order
Section 107(1) of the CGST Act generally allows three months from communication of the decision or order to appeal to the Appellate Authority. Under section 107(4), that authority may allow a further month if satisfied that sufficient cause prevented filing within the initial period. Because the clock runs from communication, establish and record the relevant date immediately. Verify the current law, forum and filing requirements against the order. The statutory period is in CGST Act section 107; procedural requirements appear in the CBIC appeal rules.
If the communication is a tax demand or show-cause notice
Do not use the refund-rejection appeal timeline as the deadline for answering a demand or show-cause notice. Read the notice for the provision invoked, allegations, proposed tax, reply deadline, hearing details and response channel. The applicable procedure and next step depend on the document and the stage of the case; the refund objection process and the first-appeal period described above do not automatically apply. Have an Indian GST practitioner or tax lawyer review the notice promptly, especially if it proposes tax, interest or penalty.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Establish whether the foreign counterparty is a branch or a separate company
Legal identity—not common ownership, branding or a group relationship—is central to the branch issue. Map the actual supplier and recipient named in the agreement, invoices, registrations and notice. Collect incorporation records, branch registrations, relevant tax registrations, group-structure documents and the contract.
| Question | Same legal person’s overseas branch or head office | Separately incorporated foreign entity |
|---|---|---|
| What is the identity issue? | Whether the Indian and foreign establishments belong to the same person for section 2(6)(v) and section 8 purposes. | Whether the foreign counterparty is a separate legal person, rather than another establishment of the Indian supplier. |
| Does foreign-group affiliation settle the issue? | No. Establishments of the same person are the concern described by the statute. | No. Group affiliation alone does not establish that the parties are the same legal person. |
| What should be checked? | Branch or head-office records, registrations, contract, invoices and who requested and received the service. | Incorporation and ownership records, the actual contracting parties, service facts and the other export conditions. |
| What can be concluded from the structure alone? | The distinct-establishment condition is directly implicated; the other statutory conditions and transaction facts still need review. | Branch-to-branch reasoning should not be assumed to apply automatically; export eligibility still depends on the statutory conditions and facts. |
This comparison is a guide to the identity question, not a decision on any particular transaction. The GST Council’s materials describe the distinction between a branch and a separately incorporated subsidiary, but the legal documents and actual parties control the analysis: GST Council meeting materials.
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Build a record that answers the stated objection
Organize the evidence around the points in dispute. The following is a practical working list, not an official exhaustive checklist:
- Supplier and recipient: agreements, statements of work, invoices, incorporation or branch records, and registrations identifying the legal parties.
- Service and performance: work product, delivery records and correspondence showing who requested, performed and received the service.
- Place of supply: records relevant to the service and the place-of-supply rule the authority has applied or challenged.
- Payment: remittance and accounting evidence relevant to the statutory payment condition.
- Entity relationship: documents establishing whether the overseas counterparty is a branch or head office of the same person, or a separate incorporated entity.
Keep the response tied to the authority’s stated ground. If the objection concerns the identity of the recipient, payment evidence alone will not resolve it; if the authority raises several grounds, address each one with the relevant facts and documents.
Get advice on the actual document and deadline
Ask an Indian GST practitioner or tax lawyer to review the communication, service, entity structure, relevant version of the law, response or appeal route, and deadline. This is especially important where the authority has issued a final order or proposed a tax demand. The governing procedural path depends on what was issued and when it was communicated, not merely on the fact that export treatment was denied.
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