In the draft, the ministry wants to impose VAT on most exported services, instead of the zero rate as currently. The reason for the amendment is that tax authorities found it difficult to distinguish between revenues from exported services and from domestically consumed. According to the VCCI services export has huge potential for development. According to VCCI, most countries around the world are imposing zero VAT on exported services and allow tax refunds on inputs. Thus, VAT on exported services should be kept at zero, VCCI said.
