Usually, a service supplied by an Indian-incorporated company to its own overseas branch is not an export of services under India’s IGST Act. The company and its branch are establishments of the same person, which fails one of the five required export conditions. A separately incorporated foreign subsidiary is different: it is a separate legal person, so that particular bar does not apply—but all the other export conditions still must be met.
This is a general explanation of India’s GST rules, not a conclusion about a particular transaction. The service, parties’ legal identities, place of supply and payment route can all matter. Start with the legal identity of the recipient, then assess the remaining statutory conditions and any separate GST consequences.
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Start by identifying who supplied and received the service
The first question is not where the work happened or where the recipient’s office is located. It is whether the overseas recipient is legally the Indian company’s own branch or office, or a separate company incorporated abroad. That distinction addresses the fifth condition in the export definition, which asks whether the supplier and recipient are merely establishments of the same person.
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A branch, agency or representative office that is not incorporated under the law of the overseas country is an establishment of the Indian company. When the Indian company supplies a service to that establishment, the supplier and recipient are establishments of the same person for the relevant IGST rule. CBIC Circular 161/17/2021-GST, dated 20 September 2021, expressly says such a supply cannot be treated as an export of services.
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A foreign subsidiary incorporated as a separate company is a different legal person from its Indian parent. CBIC’s circular says a supply from the Indian company to that foreign company may qualify as an export, subject to the remaining statutory conditions. Being in the same corporate group does not by itself make a subsidiary a branch, and it does not by itself establish export status.
This means that “overseas” describes location, not legal identity. A service performed for a team abroad, charged to an overseas cost centre, or invoiced to an address in another country is not automatically a service to a separate foreign recipient. Establish what entity or establishment is actually receiving the service. Review the entity’s legal records and the transaction documents together rather than relying on a label used for accounting or invoicing.
Branch and subsidiary compared
| Question | Indian company’s overseas branch or representative office | Separately incorporated foreign company |
|---|---|---|
| Legal identity for this rule | Another establishment of the same person | A separate legal person |
| Does the distinct-establishment condition prevent export treatment? | Yes. The fifth condition in section 2(6) is not met. | No, not on that ground alone. |
| Are the other export conditions still relevant? | They cannot cure the failed fifth condition, though other GST consequences still need analysis. | Yes. The other four conditions must all be satisfied. |
| What should you verify? | Whether the office is the Indian company’s branch, agency or representative office and is not separately incorporated abroad. | Its separate incorporation and legal identity, as well as the service, place of supply and payment conditions. |
Use the recipient’s legal form and place of incorporation to answer the identity question. An overseas address, an invoice description, an internal cost allocation or a group chart is not enough by itself to establish that the recipient is a separate person. Likewise, the fact that a foreign company is owned by the Indian company does not make it the Indian company’s branch for this test if it is separately incorporated. The relevant distinction is between an establishment of the Indian company and a distinct incorporated company.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11CBIC Circular 161/17/2021-GST makes this contrast directly. It states that a supply by an Indian-incorporated company to its branch, agency or representative office in another country, where that office is not incorporated under that country’s laws, is a supply between establishments of distinct persons and cannot be treated as an export. It separately explains that a foreign company incorporated outside India is a separate person; a supply to it can qualify if the other section 2(6) requirements are met.
Apply all five export conditions
Section 2(6) of the Integrated Goods and Services Tax Act, 2017 defines export of services through five cumulative conditions. Treat them as a checklist: if even one is not met, the service does not qualify as an export under this definition. The conditions answer different questions, so evidence supporting one should not be treated as proof of another.
- Supplier located in India. Identify the supplier and the establishment from which it makes the supply. The fact that the company is incorporated in India is important to the scenario, but the conclusion should be based on the actual supplier and establishment involved in the transaction.
- Recipient located outside India. Establish where the recipient is located; an overseas service address alone does not answer whether the recipient is a branch or a separate legal entity. Legal identity and location are related but distinct issues.
- Place of supply outside India. Determine the place of supply under the rule applicable to the actual service. Recipient location and place of supply are separate questions. A recipient abroad does not, by itself, establish an overseas place of supply.
- Qualifying payment received. The consideration must be received in convertible foreign exchange or through another route recognized under applicable law and CBIC clarification. Identify the actual route and retain evidence of the receipt.
- Supplier and recipient are not merely establishments of a distinct person. Check whether they are separate persons or establishments of the same person under Explanation 1 to section 8 of the IGST Act. An Indian company supplying its own overseas branch fails this condition.
Passing the identity test is necessary but not sufficient. For example, a separately incorporated foreign subsidiary may satisfy the fifth condition, but that does not determine where the place of supply is or whether the payment requirement is met. Equally, a service that appears to have been performed for an overseas operation still fails the export definition if the recipient is the Indian company’s own overseas establishment.
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It is useful to record a separate conclusion against each condition. For a distinct foreign company, the file should not stop at “separate subsidiary.” It should also explain the supplier and recipient locations, the place-of-supply rule applied to the service, the payment route, and why the supplier and recipient are not merely establishments of the same person. If one condition cannot be established, do not describe the service as an export under section 2(6) merely because the others appear to be met.
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Determine the place of supply from the actual service
The place-of-supply condition can decide the result even when the recipient is a separate foreign company. The analysis depends on what service was actually supplied and any special rule applicable to that service. Do not assume the place of supply is outside India simply because the customer or an internal business unit is overseas.
Begin with the service as it was contracted and performed, rather than a broad account name or a short invoice description. Identify the work, the parties involved, what the Indian supplier undertook to do, and whether it supplied its own service or arranged for a supply between other persons. Then consider the place-of-supply rule that applies to that service. The location of the recipient is one part of the export definition; it does not replace this separate analysis.
Check whether the service is intermediary activity
The IGST Act’s intermediary definition covers a broker, agent or other person who arranges or facilitates a supply between two or more persons. It excludes a person who supplies the service on its own account. For intermediary services, the place-of-supply rules may locate the supply at the supplier’s location in India, which would prevent the export test from being met.
CBIC Circular 107/26/2019-GST and Circular 202/14/2023-GST emphasize that intermediary classification depends on the facts and circumstances, including identification of the principal or main supply. Support, coordination, customer contact or work connected to another group company does not automatically make a service intermediary activity. The label “support” also does not settle the question in the other direction; the parties’ actual roles must be assessed.
Describe the service in operational terms: who contracted to do what, who performed it, whether the Indian entity supplied it on its own account, and whether it arranged a supply between other parties. Review the contract alongside how the work was actually carried out. A label in an intercompany agreement is not a substitute for that analysis.
For instance, if the agreement uses a general description such as coordination or assistance, ask what that meant in practice: was the Indian entity itself providing the agreed service, or was it acting as an agent or other intermediary arranging a separate supply? Identify the principal or main supply and the parties to it before reaching a classification. This is a factual inquiry, not a rule that every service involving another group company or overseas customer is intermediary activity.
Check how payment was received
Payment is a separate condition; export status is not restricted to a simplistic “foreign currency only” test. Section 2(6)(iv) also accommodates other payment routes recognized under applicable law and CBIC clarification. Accordingly, an INR-denominated receipt should not be rejected automatically, but neither should an INR receipt be assumed to meet the condition without checking the route.
CBIC Circular 202/14/2023-GST, dated 27 October 2023, addresses receipts in Special INR Vostro accounts permitted by the Reserve Bank of India and their admissibility for this condition. If a transaction uses that route, verify that the account, transaction and receipt fall within the circumstances addressed by the circular. Keep the relevant bank and remittance records with the transaction file. The existence of an INR receipt alone does not establish that the statutory payment condition is satisfied.
For the file, document how the consideration was paid and received and retain the bank or remittance evidence showing the relevant route. If the claimed basis is a Special INR Vostro account, connect the receipt to the account and transaction and assess it against the circular’s stated circumstances. This payment check does not resolve the separate recipient-identity or place-of-supply questions; all five export conditions remain cumulative.
Gather these facts before deciding
A defensible conclusion starts with records that show the parties’ legal identities, the service supplied and the route by which payment was made. Collect the following before treating an invoice as an export:
- Supplier details: the supplier’s legal entity, place of incorporation, GST registration and establishment involved in making the supply. Confirm that the entity named in the contract and invoice is the entity whose status is being assessed.
- Recipient identity: the recipient’s legal name and place of incorporation, plus evidence showing whether it is a branch of the Indian supplier or a separately incorporated foreign company. Do not infer separate identity solely from an overseas address or from membership in the same group.
- Service evidence: the work performed, who performed it, who received or used it and who benefited. Avoid relying solely on a broad label such as “management support.”
- Contract and transaction records: contracts, statements of work, invoices and intercompany agreements, checked against the parties’ actual roles and conduct. If the documents describe a service in general terms, make sure the operational record explains what was done.
- Place-of-supply analysis: the rule applicable to the service and the reason the place of supply is inside or outside India, including an analysis of possible intermediary status or another specially governed category.
- Payment evidence: bank, remittance and receipt records, assessed against the applicable payment rule. For a claimed Special INR Vostro route, check the circumstances in Circular 202/14/2023-GST.
- Other GST treatment: whether a rule treats a related-person or distinct-person transaction as a supply even if no separate amount was charged.
Keep the records tied to the conclusion, not merely in a general archive. A useful transaction file can show, in sequence, the recipient’s legal status, the service and the parties’ roles, the place-of-supply analysis, and the payment evidence. That makes it easier to distinguish the export classification from the separate question of what GST treatment applies if export status fails.
What if the service is not an export?
A failed export test does not, by itself, establish either that there is no supply or that a particular amount of GST is due. Those questions require separate analysis of the applicable charging provisions, place-of-supply rules, valuation provisions, exemptions and input tax credit rules. The answer depends on the actual transaction and the provisions that apply to it.
CBIC’s Sectoral FAQs discuss a particular banking context: services by a bank or Indian branch to an offshore branch or head office, where the service is not intermediary activity or a service to account holders, are described as inter-State supplies between distinct establishments rather than exports. The FAQs also discuss taxable-supply treatment without consideration in the cited management or stewardship context. These are scenario-specific explanations, not a rule that every service to an overseas branch has identical tax treatment.
In practice, do not stop at “not an export.” Identify the actual supply and then test the GST consequences that apply to that transaction. In particular, do not assume that a zero intercompany charge means there is no GST issue. The cited FAQ context shows why consideration and the existence of a supply need to be assessed under the applicable GST rules, rather than inferred solely from whether an invoice has a separate charge.
Nor does a non-export result mean the export condition can simply be ignored and the transaction left unclassified. The distinct-establishment issue answers whether the service fits the section 2(6) definition. Charging, place of supply, valuation, exemptions and credit questions are distinct steps. A transaction-specific review should keep those questions separate and avoid treating the example in the banking FAQ as a universal outcome for every industry or service.
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- Confirm the legal recipient. Obtain incorporation or branch records and establish whether the overseas office is part of the Indian supplier or a separate foreign company. Check the recipient’s legal form and place of incorporation, not only its address or group relationship.
- Apply the distinct-person condition. If the recipient is the Indian company’s own overseas branch, agency or representative office, do not treat the supply as an export under section 2(6); continue separately to determine its GST treatment.
- For a separate foreign recipient, test the other four conditions. Confirm the Indian supplier, recipient location, place of supply and qualifying receipt of payment. A separate foreign company clears only the identity obstacle, not the remaining tests.
- Analyze the service itself. Check any special place-of-supply rule and whether the actual contractual and operational role fits the intermediary definition. Determine whether the Indian entity provides the service on its own account or arranges or facilitates another supply.
- Verify and document payment. Record the payment route and preserve supporting bank or remittance records. Where the claimed route is a Special INR Vostro account, check the particular facts against Circular 202/14/2023-GST.
- Document the conclusion and its basis. Keep the identity, contract, service, place-of-supply and payment evidence together, and distinguish the export decision from the separate decision about GST liability if export treatment fails.
CBIC Circular 161/17/2021-GST, dated 20 September 2021, provides the central distinction: a company incorporated in India and its unincorporated overseas branch or representative office are establishments of the same person, while a foreign company incorporated outside India is a separate person. The transaction still has to satisfy every applicable export condition before it can be treated as an export of services.
Frequently Asked Questions
Is a service provided by an Indian company to its overseas branch an export under GST?
Generally, no. Under CBIC Circular 161/17/2021-GST, a service from an Indian-incorporated company to its own branch, agency or representative office abroad that is not separately incorporated there is a supply between establishments of the same person. It therefore fails the fifth condition in section 2(6) of the IGST Act and cannot be treated as an export under that definition. The GST treatment of the transaction still requires separate analysis.
Can an Indian company export services to its foreign branch?
Not as an export of services under section 2(6) when the recipient is the Indian company’s own overseas branch or representative office. The branch and company are establishments of the same person, so the fifth cumulative condition is not met. Other GST consequences may still apply and depend on the transaction.
Is a foreign subsidiary different from an overseas branch for GST export of services?
Yes. A separately incorporated foreign subsidiary is a separate legal person from its Indian parent, whereas an overseas branch is an establishment of the Indian company. The branch bar does not by itself disqualify a service to the subsidiary, but the supplier location, recipient location, place of supply, qualifying payment and distinct-person conditions must all be satisfied.
Does payment in an INR Vostro account count for export of services under GST?
CBIC Circular 202/14/2023-GST addresses receipts in Special INR Vostro accounts permitted by the RBI and their admissibility for the payment condition in section 2(6)(iv). Check that the particular account, transaction and receipt fall within the circular’s circumstances, and retain bank and remittance records. An INR receipt alone does not prove that the condition is satisfied.
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No. Separate incorporation means the distinct-establishment condition does not disqualify the service on that ground alone. The other four conditions still apply, including an outside-India place of supply and a qualifying payment. The actual service and its contractual and operational roles may affect that analysis.
What should a business do if its branch service fails the export test?
Do not infer from the failed export condition alone that no supply exists or that a particular GST amount is due. Separately examine the applicable charging, place-of-supply, valuation, exemption and input tax credit provisions, and consider whether a rule treats a related or distinct-person transaction as a supply even without a separate charge.
The Bottom Line
Bottom line: A service supplied by an Indian company to its own overseas branch generally fails the fifth export condition because both are establishments of the same person. A separately incorporated foreign company is different, but export status still depends on satisfying all five conditions in section 2(6) of the IGST Act. Check the actual recipient, service, place of supply and payment route, and assess GST consequences separately if the service is not an export.
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