Budget 2026 Alert: Major GST Relief for Intermediary Services 🚀
In line with the recommendations of the 56th GST Council Meeting, the Finance Bill 2026 has proposed a critical amendment to the IGST Act, 2017, specifically for Intermediary Services (brokers, commission agents, etc.).
The Key Change
The Bill proposes to omit Section 13(8)(b).
Before: The “Place of Supply” was fixed at the supplier’s location (India). You had to charge 18% GST even for foreign clients.
Now: The “Place of Supply” shifts to the recipient’s location (u/s 13(2)).
Top 3 Benefits
1. Export Status: Services to foreign clients will now qualify as Zero-Rated Exports, making you 18% more competitive globally.
2. Refund Eligibility: You can now provide services under LUT and claim a refund of Input Tax Credit (ITC) on your business expenses.
3. End of Litigation: This resolves years of disputes regarding “Intermediary” vs. “Main Service” classifications for export benefits.
Important Note on RCM
While this is a boon for exporters, Indian businesses receiving intermediary services from abroad will now be liable to pay GST under Reverse Charge (RCM).
Effective Date: This amendment will take effect upon the enactment of the Finance Bill. We recommend reviewing your service contracts now to ensure they align with the new export criteria
