The 37th GST council took the decision to not to levy GST on the intermediary deals applicable on the various international transactions. However, the decision has not come through the notification.

As per the decisions, it is cleared that the intermediaries giving services to the person receiving supply and the recipient of the goods are from outside India will not come under the GST tax ambit.

Currently, there is an 18% GST applicable to the intermediaries who are giving services to the outsider of India. There is a defined definition of the intermediary in the GST act.

It states that “a broker, an agent or any other person who arranges or facilitates the supply of goods or securities or services between two or more persons.”

While it does exclude the person who is supplying the goods and services and even both of them on his own account. The rule is applicable to the export of the services of the intermediary to the outside of India.

But both the giving and receiving of goods and services and the intermediary location are all different under which the latter is inside the India which makes him out of the ambit of GST as per the decision of GST council.

If the outward supply is made there has to be input tax credit reversed making the transaction tedious for both the taxpayer as well as the government.

It is to be seen how the decision will affect the intermediary service providers to outside of India which an impact on their cash flow due to the no input tax credit claim.

There is no notification in this regard, therefore, the decision is still not affixed.