Clarifications on Supply of Information Technology Enabled Services (ITeS)
<p><span>The Government of India has issued clarifications on the supply of Information Technology enabled Services (ITeS) such as call centers and business process outsourcing, specifically regarding their classification as "Intermediaries" and their eligibility for "export of services" status. The key points from Circular No. 107/26/2019-GST are as follows:</span></p><ol start="1"><li><span><strong>Definition of Intermediary</strong>:</span><ul><li><span>Intermediary refers to a broker, agent, or any person facilitating the supply of goods or services between two or more persons, but not supplying them on their own account.</span></li></ul></li><li><span><strong>ITeS Services Definition</strong>:</span><ul><li><span>ITeS services encompass various business process outsourcing services, including back-office operations, call centers, data processing, insurance claim processing, and more, primarily provided with information technology.</span></li></ul></li><li><span><strong>Scenarios of Supply</strong>:</span><ul><li><span>Scenario 1: ITeS services provided on own account are not classified as intermediary.</span></li><li><span>Scenario 2: Services that arrange or facilitate supply between parties fall under the definition of intermediary.</span></li><li><span>Scenario 3: Combined supply of ITeS services and facilitation services' classification depends on the principal supply.</span></li></ul></li><li><span><strong>Export of Services Eligibility</strong>:</span><ul><li><span>ITeS suppliers not classified as intermediaries can avail export of services benefits if they meet the criteria: supplier located in India, recipient outside India, place of supply outside India, payment received in convertible foreign exchange, and supplier and recipient are not merely establishments of a distinct person.</span> <a href="https://cms.plasament.com/storage/circular-cgst-107.pdf">circular-cgst-107</a><br> </li></ul></li></ol>