Resetting Intermediary Services

Resetting Intermediary Services. The omission of section 13(8)(b) of the Integrated Goods and Services Tax Act, 2017 marks one of the most consequential shifts in India’s place of supply framework since the advent of GST. For years, the intermediary services carve-out stood at the centre of intense litigation, constitutional debate, and industry pushback, primarily because it departed from the destination-based ethos that underpins modern consumption taxes. The Union Budget 2026’s decision to delete this provision signals a conscious legislative course correction, aligning intermediary services with the general rule governing cross-border supplies. However, while the amendment resolves a long-standing structural distortion, it also reconfigures the terrain of future disputes. This note examines the statutory background, the rationale behind the omission, its legal and commercial consequences, and critically assesses whether the reform closes the chapter on intermediary taxation or merely reopens the Pandora’s box in a different form.