The Indian Foreign Trade Policy (FTP), 2023- affixed 4 panoptic directives: being ‘(i.) Incentivized Remission; (ii.) Cohesive Export Promotion (ii.) Mitigated Transaction Costs- fostering Enterprise Viability (iv.) Emerging Sector Exports and Export Control (i.e., SCOMET) Rationalization’[1]. The ‘expanded ambit’ of export transactions, devoid of obstructive-regulatory costs- subject to maximized prospective remission, is hence the idealized consequence. The recommendatory impetus of the 52nd GST Council (October 7th, 2023)- specifically ‘Trade Facilitation Measures, ¶V’: included the supply of services within the ambit of exports, fulfilling condition precedent receipt of proceeds in convertible currency/INR- prescribed by §2 (6) (iv) of the IGST Act, 2017- via the modus of evidentiarily validating export proceeds received in Special Vostro accounts (as mandated by the RBI[2]) for such supply of services. The ambit of such export aspirations- additionally includes incentivized foreign sponsorship (via capital infusion and technology transfer)- of domestic product/service provision to off-shore recipients (via the ‘Make-in-India’ scheme[3])- ultimately embodying, the premise of legislative intent directing prospective purposive statutory interpretation. The objective of this article is to analytically evaluate the significant implication of contemporary Indian jurisprudence (i.e., EY Ltd v. Addl Comm CGST) in aligning such legislative intent of export promotion aspirations, with effected tax liability and the inhibition of arbitrary regulatory wilful/negligent taxable event mischaracterization (as intermediary services).
[1]Foreign trade policy 2023 announced (2023) Press Information Bureau. Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1912572 (Accessed: 28 April 2024).
[2] Reserve Bank of India – notifications. Available at: https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=12358&fn=5&Mode=0 (Accessed: 28 April 2024)– Para 3 (b.).
[3]Government takes various export promotion initiatives like new Foreign Trade Policy, extension of Interest Equalization Scheme on pre and post shipment rupee export credit, etc.. (2023) Press Information Bureau. Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1988823 (Accessed: 28 April 2024).
