MNC Arms denied GST sops as indirect tax department deems them intermediaries
As per the tax framework, an exporter need not pass on the GST paid on raw material or input services to the client and the tax paid to the supplier can be claimed from the tax department as refunds.
The tax department has now taken a stand that these companies aren’t exporters and hence they cannot get the GST refunds.
Mumbai: Subsidiaries of multinationals and Indian companies providing services to foreign entities have been deemed intermediaries or middlemen by the indirect tax department. As a corollary, the department has started rejecting Goods and Services Tax (GST) refunds—a benefit extended to exporters—for subsidiaries of multinationals in the information technology sector and Indian production houses, said sources. This comes at a time when the tax