In a recent state appeal court case the authorities found that an SSC provider that involved itself in customer documentation and contract processing for its client was involved in intermediary services with respect to its client’s supply of goods, rather than classic office support services. This caused it to lose its zero ratings for back-office services charged abroad and an 18% GST charge to apply.
This case may turn out to be a significant landmark as it opens a new door for inspectors to look into the details of what Indian SSC’s do for their clients and to apply GST in some cases. This GST would currently be an irrecoverable cost for a foreign client.
This story was originally posted on VAT Life, Quipsound’s quarterly newsletter in association with Essentia Global Services. Click here to see the story and more on VAT Life.