The GST Council has approved key reforms to simplify export rules and improve tax refunds for Indian businesses serving overseas customers. The changes aim to strengthen India’s global competitiveness and reduce the tax burden on service exporters.

Under the new rules, Indian companies can qualify for export benefits when they serve foreign customers through their own overseas branches, subject to other export conditions. This change is expected to benefit IT and IT-enabled services, engineering, consulting, analytics and research firms.

The Council has also clarified that testing, repair, certification, research and processing services performed in India on goods owned by foreign customers can qualify as exports, even if the goods do not leave the country. The move could support contract manufacturing and processing businesses.

In addition, goods supplied to overseas buyers but delivered to Special Economic Zones (SEZs) or Free Trade Warehousing Zones (FTWZs) in India will qualify for zero-rated GST treatment, subject to prescribed payment conditions.

The reforms also expand tax refund benefits. Businesses facing an inverted tax structure will be able to claim refunds of accumulated input tax credit on input services from November 1, 2026. Eligible tax credit on plant and machinery will also become refundable over five years for credit availed from April 1, 2027.

India’s services exports reached $421.3 billion in 2025–26, accounting for nearly half of the country’s total exports. By aligning GST rules with global business practices and simplifying refund procedures, the reforms aim to improve cash flow, reduce working capital pressure and encourage further growth in India’s services export sector.