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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesUsually, services supplied by an Indian company to its own unincorporated overseas branch do not qualify as exports under Indian GST. The branch and the Indian company are establishments of the same legal person, treated as distinct establishments for this test. A separately incorporated foreign company is different: the distinct-establishment bar alone does not prevent export treatment, but the other statutory conditions must still be met.
Start with the five export-of-services conditions
Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) defines an export of services through five cumulative requirements. Each must be satisfied:
- The supplier of the service is located in India.
- The recipient is located outside India.
- The place of supply is outside India.
- The supplier receives payment in convertible foreign exchange.
- The supplier and recipient are not merely establishments of a distinct person under Explanation 1 to section 8.
If any condition fails, the service does not meet the statutory definition of an export of services. An overseas recipient alone is not enough. The branch question most directly affects the fifth condition; service classification, place of supply, and payment require their own checks. See the IGST Act.
Establish whether the overseas operation is a branch or a separate company
The key distinction is legal identity, not whether the overseas operation has a different name, address, or management. Section 8 of the IGST Act treats establishments in India and outside India of the same person as establishments of distinct persons. It also treats a person conducting business through a branch or agency in a territory as having an establishment there.
| Overseas operation | How it is treated for the export test | Effect on export status |
|---|---|---|
| Unincorporated branch, agency, or representative office of the Indian company | It is an establishment of the same legal person; the Indian and overseas establishments are treated as distinct persons. | A service from the Indian company to its own overseas establishment fails section 2(6)(v) and cannot qualify as an export. |
| Foreign company incorporated separately under local law | It is a separate legal person from the Indian-incorporated company, even if both belong to the same corporate group. | The distinct-establishment condition alone does not bar export treatment. The other four conditions must still be satisfied. |
CBIC Circular 161/17/2021-GST, issued on 20 September 2021, clarifies both cases. It also addresses the reverse arrangement: a branch, agency, or representative office in India of a foreign company is an establishment of that foreign company, so services it supplies to another establishment of the same foreign company outside India are not exports under section 2(6)(v). Read CBIC Circular 161/17/2021-GST.
Check the entity named in the records
Use contracts, corporate records, registrations, and invoices to identify the supplier and recipient as legal persons. A trade name or internal business-unit label does not establish that the recipient is a separate company. Conversely, common ownership or group affiliation does not by itself make two incorporated companies establishments of the same person.
Check whether a service exists even if no fee is charged
Do not conclude that there is no GST supply simply because the Indian company does not book an intercompany fee. Section 7 of the Central Goods and Services Tax Act, 2017 (CGST Act) includes activities listed in Schedule I even when made without consideration. Schedule I covers supplies between related or distinct persons in the course or furtherance of business. CBIC’s sectoral FAQ likewise states that services between distinct entities can be supplies without consideration. See the CGST Act and CBIC sectoral FAQ.
Keep the questions separate: first determine whether the arrangement is a supply, including any no-charge supply under Schedule I; then assess whether it meets the export definition and applicable place-of-supply rules.
Identify the service and determine its place of supply
Describe what the supplier actually does and identify the person for whom it performs that work. Place of supply depends on the applicable rule for the service, and some services have special rules. In particular, do not automatically classify support, back-office, or technology work as intermediary services.
For intermediary treatment, determine whether the supplier provides its own service on its own account or arranges or facilitates a supply between other persons. CBIC Circular 107/26/2019-GST says that whether a provider is an intermediary depends on the facts and circumstances, including the principal or main supply. It also clarifies that an information technology-enabled services (ITeS) supplier acting on its own account and not as an intermediary may qualify for export treatment if it satisfies section 2(6). The relevant CBIC material is in Circular 107/26/2019-GST and the sectoral FAQ.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Apply the test in a practical order
- Name the legal supplier and recipient. Identify the entities behind the business names and units involved.
- Verify the overseas entity’s status. Establish whether it is an unincorporated branch, agency, or representative office of the same company, or a separately incorporated foreign company.
- Describe the service and its recipient. Identify the work actually performed and the establishment most directly concerned with providing and receiving it.
- Determine place of supply. Apply the rule for that service and assess whether a special rule, including the intermediary rule, applies.
- Verify the location and payment conditions. Confirm that the supplier is located in India, the recipient is outside India, and payment meets the statutory convertible-foreign-exchange requirement.
- Assess supply separately from export status. Consider whether the activity is a supply even if there is no charge, then apply section 2(6)(v) to the parties’ legal relationship.
- Record the conclusion by condition. Treat the service as an export only if all five requirements are met; if not, identify the condition that fails.
What to establish before reaching a transaction-specific conclusion
The general branch rule does not decide every GST consequence for a particular arrangement. A case-specific assessment needs the parties’ legal identity, the service and the establishments involved, the applicable place-of-supply rule, and evidence of payment. Check the current statutory text and any applicable notifications for the transaction. If the overseas operation is a separate company, that resolves only the distinct-establishment issue; it does not establish that the service is an export.
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