Government of Tripura clarifies on doubts related to supply of Information Technology enabled Services

Jul 23, 2019 | by Avantis RegTech Legal Research Team


The State Government of Tripura on July 19, 2019, has clarified on doubts related to supply of Information Technology enabled Services (ITeS services).

Various representations have been received seeking clarification on issues related to supply of ITeS services such as call center, business process outsourcing services, etc. and “Intermediaries” to overseas entities under GST law and whether they qualify to be “export of services” or otherwise.

However, State Government of Tripura examined the matter and clarified the issues to ensure uniformity in the implementation of the provisions of the law across field formations, they are:

Ø  The definition of intermediary inter alia provides specific exclusion of a person i.e. that of a person who supplies such goods or services or both or securities on his own account. Therefore, the supplier of services would not be treated as “intermediary” even where the supplier of services qualifies to be “an agent/ broker or any other person” if he is involved in the supply of services on his own account.

Ø  ITeS services have been defined under Rule 10 TA(e) of the Income-tax Rules, 1962 which pertains to Safe Harbour Rules for international transactions.

Ø  There may be various possible scenarios when a supplier of ITeS services located in India supplies services for and on behalf of a client located abroad. These scenarios are:

a)      Scenario -I: The supplier of ITeS services supplies back end services.

b)      Scenario –II: The supplier of backend services located in India arranges or facilitates the supply of goods or services or both by the client located abroad to the customers of client.

c)       Scenario –III: The supplier of ITeS services supplies back end services, on his own account along with arranging or facilitating the supply of various support services during pre-delivery, delivery and post-delivery of supply for and on behalf of the client located abroad.

Ø  It is also clarified that supplier of ITeS services, who is not an intermediary in terms of section 2 (13) of the Integrated Goods and Service Tax Act, 2017, which defines “Intermediary”, can avail benefits of export of services if he satisfies the criteria mentioned in section 2 (6) of the Integrated Goods and Service Tax Act, 2017, which defines “export of services”.

[Circular No. 26/2019-GST (State)]


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