Intermediary services to foreign clients: export and refund from 30 March 2026

From 30 March 2026, the place of supply of intermediary services is the location of the recipient, not the supplier. A commission or brokerage service for a recipient outside India can therefore be an export of services, supplied under LUT without IGST, with a refund of accumulated input tax credit (ITC), provided the other export conditions are met. Finance Act, 2026, section 157.

What changed

Until 29 March 2026, section 13(8)(b) of the IGST Act made the supplier’s location the place of supply of intermediary services. An Indian agent’s service was therefore supplied in India, even when the client was abroad, and could not be an export.

Section 157 of the Finance Act, 2026 omitted that clause. Intermediary services now follow the general rule in section 13(2): the place of supply is the location of the recipient. If that location is not available in the ordinary course of business, the place of supply is the supplier’s location. IGST Act, section 13, current text with the omission footnote.

The definition of “intermediary” has not changed. It covers a broker, agent or other person who arranges or facilitates supplies between two or more persons, but not a person supplying on their own account. IGST Act, section 2(13).

From when does it apply?

The change took effect on 30 March 2026, the date the Finance Act received the President’s assent. Section 1(2) of the Act sets later dates for other sections, but not for section 157. Finance Act, 2026, section 1 and assent date. The GST Council Secretariat’s newsletter says the omission came into effect with the assent. GST Council newsletter, March 2026, page 1.

Section 157 contains no retrospective wording, and we found no CBIC circular on supplies before 30 March 2026, on pending refund claims or on open disputes for earlier periods. For an earlier period, or a service whose time of supply falls close to that date, have the treatment reviewed rather than assuming the new rule applies.

For earlier periods, courts have also held that some services are not intermediary services at all (checked 22 October 2026). On 25 September 2025 the Delhi High Court held that an education consultancy’s services to foreign universities, paid in foreign exchange, were not intermediary services. The Supreme Court dismissed the department’s appeal on 27 January 2026 without giving reasons. Commissioner of Delhi GST v. Global Opportunities, Supreme Court order. It had dismissed the department’s appeals against a Bombay High Court ruling to the same effect on 25 August 2025. Union of India v. KC Overseas Education. The Delhi High Court has since said the question “is no longer res integra” for education consultancies. Fateh Education Consulting, 8 May 2026. If your service only resembles these, compare your own contract with the facts of the rulings.

CA Deep Koradia posted the change the day after it took effect, including the reverse-charge effect described below.

Conditions that still apply

A recipient abroad settles only the place of supply. Section 2(6) of the IGST Act lists five conditions, and all of them must be met for an export of services:

1. The supplier is located in India.
2. The recipient is located outside India.
3. The place of supply is outside India.
4. Payment is received in convertible foreign exchange, or in Indian rupees where the RBI permits.
5. The supplier and recipient are not merely establishments of a distinct person, such as an Indian office and its own branch abroad.

IGST Act, section 2(6).

For an intermediary, check who the recipient actually is. Where consideration is payable, the recipient is the person liable to pay it, for example a foreign principal that pays your commission. CGST Act, section 2(93). If an Indian party is liable to pay you, the recipient is in India and the supply is not an export.

The GST Council has separately recommended removing the fifth condition for a business’s own foreign branches; that needs a further amendment. See the Council’s refund changes for service exporters.

Supply without IGST under LUT, and claim the refund

An export of services is a zero-rated supply. You can supply it without paying IGST under a Letter of Undertaking and claim a refund of the accumulated ITC. IGST Act, section 16(3).

If you have been charging GST on commission from foreign principals, take these steps for supplies from 30 March 2026:

1. Check each client against the five conditions above.
2. File an LUT in RFD-11 before supplying without IGST; see LUT filing for service exporters.
3. Issue export invoices that show the supply is under LUT; see export service invoices for a foreign client.
4. Report them as exports in GSTR-1 and keep the bank evidence for each receipt; see FIRC and bank evidence.
5. Claim the accumulated ITC refund with Statement 3 and Annexure B; see build a service-export refund claim.

Intermediary services you receive from abroad

The same change applies in reverse. When an agent outside India arranges supplies for your business in India, the place of supply is now your location in India. That makes the service an import of services, and services from a supplier in a non-taxable territory are taxed under reverse charge in the hands of the recipient. IGST Act, section 2(11); Notification 10/2017-Integrated Tax (Rate), entry 1.

Pay that tax, take the ITC where it is eligible, and keep the self-invoice; see imported-service RCM. For an exporter, the eligible ITC on tax paid this way counts towards Net ITC in a later refund claim.