Many foreign banks have already started paying 18% IGST to avoid any litigation. “The question is why the recipient head office or branches that are located outside India should bear such a cost when they do not fall under Indian tax authority’s jurisdiction,” said Sachin Menon, head, indirect tax, KPMG India. In the last one week, a group of senior tax officials has met some tax experts to know industry- specific pain points in GST.The focus was on all the issues that were raised by companies, banks and associations by filing writ petitions in courts. “The place of provision of these services is outside of India and, hence, it appears that unintended ambiguity has crept in, unlike in the earlier tax regime. The IGST provisions don't have the power to levy tax on such transactions and constitutional validity has to be tested in the courts,” said Rastogi.

Source: Economic Times October 25, 2017 18:33 UTC