Are intermediary services exports under GST after the 2026 change?

For years, "intermediary" was the word that turned an export into a domestic sale. An Indian commission agent finding buyers for a foreign manufacturer, or a firm arranging services for an overseas client, earned in foreign currency but still had to pay GST in India. That changed in 2026.¹

This guide explains who counts as an intermediary, why the old rule denied export status, what the Finance Act, 2026 changed and from when, and what still needs care. The position is stated as of 28 October 2026.¹³

What is an intermediary under GST?

An intermediary under GST is a broker, agent or other person who arranges or facilitates a supply between two or more persons without supplying it on their own account. Section 2(13) of the Integrated Goods and Services Tax (IGST) Act, 2017 defines an intermediary as:²

"a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account"

CBIC Circular No. 159/15/2021-GST (20 September 2021) sets out the key features:⁵

• At least three parties: two of them carry out the main supply, and the intermediary arranges or facilitates it. A two-party arrangement cannot be an intermediary service.⁵
• Two distinct supplies: there is the main supply between the principals, and a separate ancillary supply of arranging or facilitating it.
• A supporting role: like an agent or broker, the intermediary does not provide the main supply itself.
• Not on own account: anyone who supplies the main goods or services, fully or partly, on a principal-to-principal basis is not an intermediary.
• Sub-contracting excluded: a sub-contractor provides the main service, or part of it, and is not an intermediary.

Which arrangements count as intermediary services under GST?

The circular gives four illustrations. They are indicative only; the answer always depends on the contract and facts.⁵

Who do the intermediary services GST rules apply to?

The intermediary services rules apply to Indian businesses that arrange supplies between others for a foreign client, and in reverse to Indian businesses that pay foreign agents.²³⁵

A marketing agency that only refers leads for a commission may look more like an intermediary. The actual role in the transaction decides it, whatever the job title or the label on the contract.⁵

How do you treat intermediary services as an export after 30 March 2026?

For supplies on or after 30 March 2026, you treat intermediary services as an export by applying the recipient-location rule and checking all five export conditions.²³

1. Confirm the time of supply is on or after 30 March 2026. The old rule still governs earlier supplies.¹³
2. Where the supplier or recipient is outside India, the place of supply of intermediary services is the location of the recipient (section 13(2)), unless another specific sub-section of section 13 applies.³ An Indian intermediary whose client is located outside India therefore meets condition (iii).²³
3. Check the other four conditions in section 2(6): supplier in India, recipient outside India, payment in convertible foreign exchange (or rupees where the RBI permits), and the parties not being merely establishments of the same person.²
4. As an export, the service is zero-rated. If registered, file the LUT and invoice without IGST, or pay IGST and claim a refund.⁴ See how to file an LUT and GST on export of services.
5. Issue the invoice with the rule 46 export endorsement.⁸ See the export invoice format.

What documents and deadlines apply to intermediary services exports?

Intermediary services exports need the same documents as any export of services: an LUT for the financial year if invoicing without IGST, and an invoice with the rule 46 endorsement.⁴⁸⁹

What happens if an intermediary gets the GST treatment wrong?

An intermediary that fails any section 2(6) condition does not make an export, so the zero-rating does not apply and GST is payable as on a domestic supply.²

• Supplies before 30 March 2026: the old rule put the place of supply in India, so condition (iii) failed and GST was payable.²³⁵
• Netted or offshore commission: commission netted off by the client, or paid into an account abroad, can create problems with condition (iv).²
• Billing your own foreign branch: agents billing their own foreign branch still fail condition (v).²
• Older disputes: notices for periods before 30 March 2026 are decided under the law as it stood then.¹

What is the timeline of the intermediary services GST change?

The timeline runs from a GST Council recommendation on 3 September 2025 to the omission of section 13(8)(b) from 30 March 2026.¹⁶

The Council noted that the 2025 recommendation would help Indian exporters of such services claim export benefits.⁶ Section 157 reads:¹

"In section 13 of the Integrated Goods and Services Tax Act, 2017, in sub-section (8), clause (b) shall be omitted."¹

Section 1(2) of the Finance Act, 2026 lists the sections that start on 1 April 2026 (sections 2 to 129, clause (b) of section 152 and section 156) and those that start on a date to be notified (sections 153 to 155). Section 157 is in neither list and does not give its own start date. A central Act with no stated commencement date comes into force on the day it receives assent, so the omission applies from 30 March 2026.¹ CBIC's text of section 13 records the clause as omitted by section 157 of the Finance Act, 2026 with effect from 30 March 2026.³

We checked the Act itself for this point. We found no separate CBIC notification or circular on section 157 as of 28 October 2026, and none is needed for it to take effect, because it is not one of the sections whose start date is left to notification.¹ The definition of intermediary in section 2(13) was not amended, and Circular 159/15/2021-GST remains relevant for deciding who is an intermediary.²⁵

Why could intermediaries not claim export status before 30 March 2026?

Intermediaries could not claim export status before 30 March 2026 because section 13(8)(b) put the place of supply in India, which failed condition (iii) of section 2(6): the place of supply must be outside India.²

For cross-border services, section 13(2) normally makes the place of supply the location of the recipient. Section 13(8)(b) carved out "intermediary services" and set their place of supply as the location of the supplier, so for an intermediary in India the place of supply was India even when the client and the main supply were entirely abroad.²³⁵

This caught commission agents, sourcing agents and facilitation businesses. It also led to disputes over whether ordinary service providers, such as IT, BPO and consulting firms, were really intermediaries. Circular 159/15/2021-GST was issued after representations about the ambiguity in the scope of intermediary services. Para 3.6 of that circular also clarified that the special intermediary rule in section 13 applies only when the supplier or the recipient is outside India.⁵

What are the common mistakes with intermediary services under GST?

The common mistakes are applying the new rule to old supplies, invoicing without an LUT, and overlooking payment and group conditions.¹²⁹

• Straddling supplies: check the invoice date and time of supply for any work that straddles 30 March 2026.¹³
• No LUT in place: check that you are registered and that your LUT for the current financial year is in place before invoicing as an export.⁹
• Missing endorsement: the invoice needs the rule 46 export endorsement.⁸
• Treating a recommendation as law: the 57th GST Council recommendation on condition (v) needs a change in the law.⁷
• Ignoring imports: Indian businesses using overseas agents should check their GST treatment of those payments under section 2(11).²³

Classification as an intermediary, and the treatment of transitional and past periods, depend on your contracts and facts. Confirm with a chartered accountant (CA) before changing how you invoice or before responding to a notice.