CBIC has issued Circular No. 266/12/2026-GST dated 28 October 2026, clarifying GST applicability on research and development services, foreign shipping services, motor vehicle leasing, banking transactions and NBFC co-lending arrangements. The circular also addresses the GST treatment of services involving TRAI and aims to ensure uniform interpretation of GST provisions.
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 266/12/2026-GST dated 28 October 2026, has issued clarifications on the applicability of Goods and Services Tax (GST) to specified services following the recommendations of the 57th GST Council meeting held on 8 October 2026.
The circular addresses six key areas. These include the distinction between research and development (R&D) and consultancy services for GST exemption purposes, the treatment of services received by Indian establishments of foreign shipping companies from related overseas entities, and the inclusion of statutory and incidental expenses in the taxable value of motor vehicle leasing services.
It further clarifies the GST treatment of the Telecom Regulatory Authority of India (TRAI), notional interest arising under banks’ Fund Transfer Pricing (FTP) arrangements, and services supplied by Non-Banking Financial Companies (NBFCs) to banks under co-lending arrangements.
These clarifications seek to reduce interpretational differences, improve consistency in GST compliance and provide greater certainty to research institutions, banks, NBFCs, vehicle leasing businesses and shipping companies.
Reference: CBIC Circular No. 266/12/2026-GST dated 28 October 2026.
Source: CA Sansaar