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Nasscom welcomed recommendations made at the GST Council’s October 8, 2026 meeting on two services-export concerns: services supplied through overseas branches and work performed in India on foreign customers’ prototypes or samples. The recommendations have been reported in news coverage, but the available sources do not establish their final legal wording or effective date. They should not be treated as operative law on that basis alone.
What did Nasscom ask the GST Council to clarify?
Before the meeting, Nasscom Vice President and Head of Public Policy Ashish Aggarwal highlighted two distinct situations, as reported by Moneycontrol on October 7, 2026:
- Services routed through an overseas branch: whether services supplied through a company’s overseas branch can qualify as exports under GST.
- Work on a foreign customer’s prototype or sample: whether R&D, engineering or testing performed in India can count as an export when the foreign customer receives and uses the result abroad.
These are different fact patterns. The first concerns the relationship between an Indian business and its overseas branch; the second concerns work physically performed in India for a foreign customer. The available reports do not supply enough legal detail to determine how either recommendation would apply to a particular transaction.
What did the Council reportedly recommend?
Services supplied through overseas branches
A Rediff/PTI report published October 8, 2026 says the Council recommended removing existing restrictions that prevent certain services supplied through overseas branches from qualifying as exports. The report does not reproduce the Council’s primary recommendation text, so the precise scope and conditions are not established here.
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R&D and related work on overseas customer samples
Nasscom had also sought clarity on Indian R&D and related services involving prototypes or samples supplied by foreign customers. Aggarwal’s position, as quoted before the meeting, focused on where the customer receives and uses the result: “The current rules generally treat such a service as supplied in India, where the work is done, and deny it export treatment. The customer receives and uses the result abroad, and the service should qualify as an export,” he said.
That is Nasscom’s argument, not a definitive ruling on the current law or the Council’s final decision. The post-meeting report describes recommendations concerning R&D services, but the sources available do not provide authoritative wording that resolves the place-of-supply question for all such work.
Why does the R&D question arise?
The dispute described by Nasscom turns on potentially different locations: the work may take place in India, while the foreign customer receives and uses the resulting service abroad. Aggarwal said clarity would help as AI and other technologies broaden the range of services delivered from India and could prevent future disputes.
The issue has older policy context, but that context does not settle the 2026 recommendation. Official materials for the GST Council’s 37th meeting in 2019 recorded industry requests about export treatment for certain R&D services performed in India using foreign-customer samples, including pharmaceutical R&D and chip-design services. Those agenda items show that the place-of-supply question has arisen before; they do not establish the scope of the latest recommendation.
How does the overseas-branch issue relate to earlier GST guidance?
In its record of the 47th meeting, the GST Council said it unanimously agreed to clarify that an Indian-incorporated person and a foreign-incorporated company are separate legal entities for the export-of-services condition discussed there. That historical clarification is relevant background, but it does not by itself specify how the Council’s October 2026 recommendations change the treatment of services supplied through overseas branches.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Are the recommended changes in force, and when do they take effect?
The reports available for this article describe Council recommendations, not a published implementing instrument. They do not establish the final text of the 57th-meeting recommendation, an amending notification or circular, or a commencement date. The GST Council’s official website, retrieved October 9, 2026, listed materials through the 56th meeting.
Accordingly, the meeting coverage alone is not a sufficient basis for changing GST classification, invoicing or filing treatment. Businesses should look for the authoritative recommendation and any subsequent CBIC notification, circular or statutory amendment before acting on a specific transaction.
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