New Delhi: The GST reforms will directly bolster Global Capability Centres’ (GCCs) operations in India — not just through tax adjustments but also by enhancing their global competitiveness, cost structures, and cash flows, a report said on Sunday.
The 56th GST Council meeting has delivered one of the most sweeping tax overhauls since 2017. Earlier, services provided by GCCs to overseas affiliates often faced the risk of being classified as “intermediary,” leading to disputes, GST liability on services, and denial of export benefits, according to a report by Grant Thornton Bharat.
“With the omission of Section 13(8)(b) of the IGST Act, the place of supply for such services will now be determined by the location of the recipient. This ensures that services delivered abroad are treated as exports, eligible for zero-rating and ITC refunds,” the report stated.
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The amendment will bring greater certainty and competitiveness, while also providing relief from prolonged litigation. Further, it will open new avenues for growth by transitioning intermediary functions to Indian GCCs.
The Council has revised GST rates on several goods and services. These include a reduction in rates on air conditioners and monitors, and an increase in rates on passenger transport/renting of motor vehicles and air transport services (except economy class).
“For GCCs, this translates into both positive and negative impacts depending on the nature of goods/services procured, along with the eligibility of ITC,” the report mentioned. Provisions related to sanctioning 90 per cent of refunds on a provisional basis were already in place; however, due to manual interventions, implementation was ineffective.
“With the proposed risk-based identification and evaluation of refund claims through the system, effective implementation of these provisions may now be possible. This process will be operational from November 1, 2025. Faster, risk-based refunds will ease working capital pressure and improve cash flow predictability,” the report noted.
The number of Global Capability Centres (GCCs) in India is expected to rise from 1,700 to over 2,200 by 2030.
