Fintech, IT companies with tripartite pacts under GST scanner
The tax department has held back the export benefits of many companies that have three-way contracts, or tripartite agreements, with multinationals, said people dealing with such cases.
The indirect-tax department is of the view that many fintech companies, captive units of multinational banks and several other entities providing IT and IT-enabled services that have such agreements don’t really export services but are merely intermediaries or agents.
As per current regulations, exports do not attract GST and exporters can also claim refunds of the tax paid on inputs from the revenue department. This policy is aimed at making Indian goods and services more competitive in the international markets.
