Washington, D.C., June 25, 2024

The US-India Tax Forum, a dedicated tax policy forum of the US-India Strategic Partnership Forum (USISPF), extends its gratitude to the GST Council for accepting several recommendations made by the US-India Tax Forum at the 53rd GST Council Meeting. The GST council meeting was chaired by the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman in New Delhi on June 22, 2024.

The US-India Tax Forum thanks Deloitte India for its support in taking forward critical issues with the Ministry of Finance.

Key Recommendations Accepted by the GST Council:

The recommendations of US-India Tax Forum aimed to address significant ease of doing business challenges and promote investments and economic opportunities in India. The accepted recommendations include:

1. Reduction of TCS Rate: The reduction of Tax Collected at Source (TCS) rate on supplies through E-commerce Operators (ECOs) from 1% to 0.5%.
2. Import of Services Clarification: Clarification that the import of services by domestic entities from foreign affiliates is eligible for full Input Tax Credit (ITC).
3. Corporate Guarantees Valuation: Clarification on various issues regarding the valuation of services for providing corporate guarantees between related parties.
4. Securities Reimbursement Taxability: Clarifications on the taxability of securities reimbursement as ESOP/ESPP/RSU provided to employees.
5. Place of Supply Clarification: Clarification on the place of supply for goods delivered to a different address than billed.
6. Cess Exemption: Exemption from Compensation Cess on aerated beverages and energy drinks supplied to Ministry of Defence Unit Run Canteens.
7. Uniform IGST Rate: Uniform 5% IGST rate on imports of aircraft parts, components, testing equipment, tools, and toolkits to boost MRO activities.
8. Pre-deposit Reduction: Proposed GST law amendment to reduce the pre-deposit amount required for filing appeals.
9. Custodian Services Supply Place: Clarification that the place of supply for custodian services by Indian banks to Foreign Portfolio Investors (FPI) is the FPI’s location.

Dr. Mukesh Aghi, President and CEO, USISPF, welcomed the changes, stating, “The first GST Council meeting after Prime Minister Modi’s renewed mandate has introduced several significant and investment-friendly measures. These key themes—ease of doing business, certainty in the tax regime, and reduced litigation—reflect the Government’s proactive and receptive approach. This meeting has effectively addressed numerous interpretational and procedural issues within the GST law.”

The members of US-India Tax Forum expressed their gratitude for their continued support and advocacy on GST issues. They highlighted the invaluable assistance provided by USISPF in addressing long-standing issues that posed significant industry-wide concerns.

USISPF remains committed to building on this momentum, addressing areas for reform in GST 2.0 and advocating for better tax policies to improve the ease of doing business environment.

About the US-India Strategic Partnership Forum (USISPF):

The US-India Strategic Partnership Forum (USISPF) is committed to creating the most powerful partnership between the United States and India. As the only independent not-for-profit institution dedicated to strengthening the U.S.-India partnership in Washington, D.C., and in New Delhi, USISPF is the trusted partner for businesses, non-profit organizations, the diaspora, and the governments of India and the United States.

About the US-India Tax Forum:
The US-India Tax Forum is USISPF’s dedicated Tax Policy Forum which enables focused discussion on important advocacy areas across tax regimes in India. The US-India Tax Forum has around 350 member companies and is the leading tax platform bringing Government of India policymakers, global tax experts, and the business community at large to advocate for better tax policy.

The Tax Forum was officially launched on February 25, 2020, and is an initiative to provide member companies with a platform to engage with relevant Government officials on tax issues as they conduct business in the US-India corridor, discuss the future of taxation and how businesses and governments can work together in a global world to improve the ease of doing business environment.

For media inquiries and further information, please contact:
Ankit Jain – [email protected]

Akshobh Giridharadas- [email protected]