CBIC withdraws GST circular in ITeS

New Delhi, December 5 () The Central Board of Indirect and Customs Taxes (CBIC) withdrew a circular that created confusion about whether IT service providers can be qualified as intermediaries based on self-assessment under the property tax and services (GST).

The government has withdrawn the circular in view of numerous representations received that express apprehensions about its implications.

In view of these apprehensions and to ensure uniformity in the implementation of the provisions of the law in the field formations, the Board (CBIC) ... withdraws, ab-initio, Circular No. 107/26/2019-GST dated 18.07.2019, said an official notification.

At the beginning of the year, the government issued a circular on the scope of services enabled for information technology (ITeS) and the coverage of intermediary services.

This circular had created confusion with this, leaving ITeS service providers a self-assessment of whether they qualified as intermediaries. This involved a series of notices issued at ITeS companies.

Commenting on the withdrawal of the circular, EY's fiscal partner, Abhishek Jain, said the previous circular had fueled ambiguity for back office support centers specifically on whether some of the activities carried out by them involved their coverage under ' intermediary'. While the withdrawal of the circular should be useful, the industry also expects an explicit clarification on the scope of the intermediary; to avoid unjustified litigation and possible financial repercussions and uncertainty, he said. DP HRS

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