Cross-border service delivery is central to the operating model of most GCCs. The global capability center may be operating to strengthen finance, technology, analytics, procurement, or back-office functions for overseas group entities. In any case, the way GST is treated during these transactions directly affects profitability, cash flow, and the risk of compliance.
While valuable GST benefits apply to the exports, many GCCs encounter challenges when it comes to determining their eligibility for exports, claiming refunds, or defending their positions during audits. A small error in classification can turn a zero-rated transaction into a taxable one, leading to tax demands, interest, and disputes.
