I’m Simran Bhatt, currently juggling articleship and preparing for CA Final, with taxation as my chosen specialization. I’m facing a bit of a dilemma regarding GST on cross-border transactions, specifically related to services.
During my articleship, I’ve been handling some cases where Indian companies are providing consultancy services to overseas clients. The challenge I’m encountering is in consistently applying the place of supply rules under the IGST Act, 2017. While Section 13 generally covers services provided to recipients outside India, differentiating between intermediary services (where the place of supply is the location of the service provider) and other exported services (where the place of supply is the location of the recipient) is proving difficult.
I’m finding that the definition of ‘intermediary’ under the GST law is quite broad and open to interpretation. Could someone share practical examples or insights on identifying intermediary services in the context of cross-border consultancy? Specifically, what factors does the assessing officer usually consider when determining whether a service qualifies as intermediary vs. a direct export of service? I’m trying to ensure accurate GST compliance and avoid potential disputes down the line.
Hi Simran,
I understand your confusion regarding the intermediary definition under GST. It’s a common pain point, especially in cross-border consultancy services.
From what I’ve gathered during my CA Final prep for May 2026 and my articleship, the key lies in understanding the nature of the service. Intermediary services essentially facilitate or arrange a supply between two other parties. Think of it as acting as a broker or agent. The crucial point is that the intermediary does not provide the main service themselves; they only facilitate it.
A simple example: If an Indian company helps a US company find a software developer in India, that’s likely an intermediary service. The place of supply would be the location of the Indian company (i.e., taxable in India).
However, if the Indian company provides the software development service directly to the US company, that’s an export of service, and the place of supply is the location of the recipient (US).
The assessing officer often looks at the contract’s language, the flow of funds, and the degree of control the Indian company has over the ultimate service. Does the Indian company merely connect parties, or do they actively participate in providing the service?
ICAI’s guidance notes on GST offer some clarifications on this. Also, Section 13 of the IGST Act, read with the definition of ‘intermediary,’ is your go-to resource. I would advise documenting the entire process clearly in the invoices. This can help to avoid issues during assessments.