The Indian tax department has brought top international consultancies and national law firms into the preview of indirect taxation.
Department denied the services of these companies to be in the nature of exports and proposed the levy of 18% GST on the services so rendered.
The whole levy is based on the controversial debate of what constitutes an export and what is an intermediary operation. The department is using the ruling of the Maharashtra Authority on Advance Ruling in Micro Instruments (Vishakhar Prashant Bhave), (GST-ARA-23/2018-19/B-87) that allowed an 18% levy on the intermediary services which does not amount to export, but an inter-state supply.
Source: The Economic Times