Neutral impactSector
NASSCOM proposes structural rationalisation of GST norms for Head-to-Branch Office transactions
BusinessLine 1 hr ago·6 Oct 2026, 3:35 pm
NASSCOM has urged the government to amend the Goods and Services Tax (GST) framework. The industry body is specifically asking to remove a recent definition of 'export' that excludes services provided between a head office and its branch office located in India. This change would allow these internal transactions to be treated as exports, subjecting them to a zero GST rate.
This move is significant for the IT and software services sector. Currently, companies face a 18% tax on these internal transfers, which increases their overall tax burden. By aligning with global standards and simplifying the tax structure, the government aims to reduce compliance costs and improve the competitiveness of Indian firms.
Investors should monitor the government's response to this proposal. A positive outcome could lead to a more favourable tax regime for IT companies, potentially boosting their profitability. However, the final decision rests with the finance ministry, and the timeline for implementation remains to be seen.
Excerpt from BusinessLine
Technology Industry representative body of India Nasscom pushed for a structural rationalisation of the existing GST framework for cross-border Head Office–Branch Office (HO–BO) transactions to the Finance Ministry in a recent submission. Nasscom has proposed a co-ordinated reform package that will enable export…Read the original at BusinessLine
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