Benching Vs GST Refunds

Are you an exporter of services to cross border group companies. The IT and IT-enabled Services (ITeS) industry operates with substantial talent pools to meet varying global demands. Employee "benching," a common occurrence where staff are retained on payroll without active project deployment, poses challenges within the Goods and Services Tax (GST) framework. Primarily involved in zero-rated service exports, the sector is eligible for refunds on unused Input Tax Credit (ITC). Claims for unutilised ITC could be questioned if a significant portion of costs pertain to non-billable resources. Benched employees, not directly contributing to exports, may raise concerns regarding accurate ITC distribution. J the App by JustIDT shares the concerns and the ways to address the issue.