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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Nasscom has asked India’s GST authorities to clarify two unsettled questions about services exports: how to treat services supplied through an Indian company’s overseas branch, and whether work in India on a foreign customer’s prototype can qualify as an export when the customer receives and uses the result abroad. A PTI report published by Mint on October 7, 2026, said the issues were expected to be considered at the GST Council meeting scheduled for October 8. The outcome was not yet known when the report was published.
What Nasscom asked the GST Council to clarify
Nasscom raised the two issues in a fresh submission to GST authorities on October 5, 2026, according to Mint’s October 7 PTI report. The report does not reproduce the submission or specify the amendments Nasscom proposed.
- Overseas branches: How GST should treat services supplied by an Indian exporter through its own overseas branch.
- Prototype-related work: Whether research, engineering or testing carried out in India on a prototype or sample supplied by a foreign customer should count as an export when the customer receives and uses the result abroad.
These are separate questions. The first concerns the exporter’s legal structure; the second concerns services performed in India and where their result is received and used. Nasscom’s position on the second issue is an industry request, not a settled legal ruling.
Why a branch is different from a foreign subsidiary
An overseas branch is part of the Indian company that operates it; a separately incorporated foreign subsidiary is a different legal entity. That distinction matters to the GST export-of-services condition concerning whether the supplier and recipient are distinct persons.
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In 2021, the GST Council agreed to clarify that an Indian-incorporated company and a foreign-incorporated company are separate persons for that relevant condition. The official record appears in the Council’s 45th meeting materials and the detailed agenda note for its 47th meeting. That clarification addresses separately incorporated companies; it does not establish how services supplied between an Indian company and its own overseas branch should be treated.
| Issue | Indian company’s overseas branch | Separately incorporated foreign subsidiary |
|---|---|---|
| Legal structure | The branch is part of the Indian company. | The foreign subsidiary is a separate incorporated company. |
| What the cited Council record establishes | The 2021 clarification cited here does not settle the Indian company’s own branch treatment. | The Council agreed that an Indian-incorporated company and a foreign-incorporated company are separate persons for the relevant export condition. |
| Reported concern | Nasscom says branch-based exports can face different GST treatment, input tax credit reversals and added compliance work; the report gives no figures for these effects. | The Mint report contrasts subsidiary routing with branch routing but does not quantify costs or establish that every subsidiary transaction qualifies as an export. |
Does research or testing in India on a foreign prototype qualify as an export?
The question Nasscom raised is whether research, engineering or testing performed in India can qualify as an export when the foreign customer supplies the prototype or sample and receives and uses the resulting work abroad. The reported dispute concerns both where the service is carried out and where its output is received and used; the available account does not establish a definitive legal test or outcome.
Nasscom Vice President and Head of Public Policy Ashish Aggarwal said the current rules generally treat such a service as supplied in India, where the work is done, and deny it export treatment. He argued that because the customer receives and uses the result abroad, it should qualify as an export. This is Nasscom’s view as reported by PTI, not an independent determination of the law. The report does not provide the relevant contract terms, service classification or a ruling for a particular transaction.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What was known about the October 8, 2026 meeting
As of Mint’s October 7 report, the GST Council meeting was scheduled for the following day and the two matters were expected to be considered. The cited material does not establish what the Council decided at that meeting or whether a later legal instrument resolved either issue. The 2021 clarification on separate incorporated companies should not be read as a decision on the current branch or prototype-related requests.
Ashish Aggarwal said clarity could support competitiveness, release working capital and reduce litigation faced by the industry. Those are benefits Nasscom anticipates; the report supplies no measured impact figures.
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