The Central Board of Indirect Taxation and Customs has asked field authorities to use its June 26 circular while evaluating issues on related party import of services by local firms. The circular states that the cost of services rendered by a foreign affiliate is considered to be zero if a linked domestic firm has not yet received an invoice for such services, and therefore no GST would be applied. This move may provide some comfort to Infosys and other software businesses facing large GST demands. Field officers are now required to re-examine the Infosys case and those of other IT and ITeS companies following the company’s response.
Source A2ztaxcorp
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