The Finance Act, 2026 omitted Section 13(8)(b) of the IGST Act with effect from 30 March 2026. Until then, the place of supply of an intermediary's own service was the location of the supplier. With the clause gone, the default rule in Section 13(2) applies instead, and the place of supply follows the location of the recipient. Commentary treated this as relief for Indian intermediaries, whose services had been denied export treatment because the place of supply was pulled back into India. The mirror image attracted far less attention. For a foreign platform characterised as an intermediary — including some facilitating crypto trading — the old clause placed the supply outside India and therefore outside the Indian net. The same change that releases Indian exporters can pull inbound foreign intermediaries in, prospectively, from the date the omission takes effect.
What the clause did, and what replaced it
Section 13(8)(b) of the IGST Act carved intermediary services out of the default place-of-supply rule. Instead of following the recipient, the place of supply followed the supplier. For an Indian intermediary serving a foreign principal, that meant the supply was treated as made in India, so it could not qualify as an export — a long-running grievance that generated years of litigation.
The GST Council recommended changing this at its 56th meeting in September 2025, and the Finance Act, 2026 gave it effect by omitting the clause. With the carve-out gone, intermediary services fall back to Section 13(2), where the place of supply is the location of the recipient.
The inbound consequence nobody led with
Read the rule in reverse and the effect is not relief but exposure. Where a foreign platform was characterised as an intermediary, the old clause fixed the place of supply at the supplier's location — outside India. On that reading, the intermediary's own fee sat outside the Indian net.
Once the place of supply follows the recipient, that protection falls away for supplies to Indian recipients. Platforms that facilitate transactions between users — crypto trading venues among them, where the platform earns commission or spread rather than trading on its own account — are precisely the category this reasoning reaches.
This is why the change deserves more attention than it received from foreign suppliers: the headline was written for Indian exporters, and the inbound effect ran the other way.
Three things to establish before relying on either reading
Characterisation comes first. The analysis only engages if the platform is an intermediary at all. In the online money gaming litigation the Supreme Court treated operators as suppliers rather than intermediaries. A platform arguing it was an intermediary before the omission has to meet that reasoning on its own facts — terms of service, custody, whether it ever takes a principal position — not assert it.
The cut-off date is 30 March 2026. The omission takes effect from that date, so it operates prospectively. Supplies made on or after it follow the recipient-location rule; supplies made before it do not.
Split the assessment at that date. Periods up to 29 March 2026 are analysed under the old clause, and periods from 30 March 2026 under Section 13(2). Where a demand spans both sides of the line, the two periods should be argued separately rather than as one — this is the single most useful consequence of the change for a platform facing a retrospective assessment.