Finance Bill, 2026: Amendments proposed in the IGST Act, 2017 ensuring Relief to Taxpayers [Read Finance Bill 2026]
A key reform relating to the Integrated Goods and Services Tax (IGST) has been proposed via the Finance Bill, 2026 to simplify GST law and reduce litigation
The Finance Bill, 2026 was introduced in the Lok Sabha alongside the Union Budget for 2026-27 by Finance Minister Nirmala Sitharaman today.
Among the proposed GST changes introduced via the Bill, a key reform relating to Integrated Goods and Services Tax (IGST) was proposed to simplify the GST framework and reduce litigation.
Under the current IGST framework, there has been a major dispute on how the place of supply for intermediary services such as referral, agent, broker or facilitation services is determined for GST purposes. To address this issue, the Finance Bill proposes to make changes to subsection (8) of Section 13 of the IGST Act, 2017, which states -
Section 13 (subsection 8) - The place of supply of the following services shall be the location of the supplier of services, namely:
(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;
(b) intermediary services;
(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.
The intention is to omit clause (b) of subsection (8) of Section 13 of the IGST Act. With this change, the place of supply for "intermediary services" will be determined as per the default provision under section 13(2) of the IGST Act.
This amendment is expected to make a significant difference for Indian service exporters who act as intermediaries for foreign clients. Industry experts have welcomed this change as a practical reform that will provide relief to taxpayers by reducing disputes and improving clarity.
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