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The GST Council announced a sweeping change that will slash the tax on IT service exports to zero, a move that could light a fire under the hiring engines of TCS, Infosys, and Wipro.
On May 15, 2024, the council’s decision came after years of debate and was hailed as a win for India’s software export industry.
What the rule change actually means
Under the new directive, any software or IT service exported from India will attract 0% GST instead of the standard 18% or 12% rates that applied previously.
For firms that generate most of their revenue overseas, this translates into a direct boost to their profit margins, freeing up capital for recruitment and innovation.
How big names are reacting
Senior executives at TCS, Infosys and Wipro are already lining up interview rooms and drafting new hiring budgets.
“We’re planning to add 5,000 new roles by the end of Q4,” said Rajeev Kumar, TCS’s HR chief, in a brief statement after the announcement.
But the real excitement comes from the fact that the cost savings will allow these companies to offer higher salaries and better benefits to attract top talent.
“The GST Council has announced a 0% GST rate on all IT service exports, effectively removing the tax burden,” said Ramesh Kumar, senior tax officer.
Potential ripple effects
Industry analysts predict that the hiring surge will ripple through the entire tech ecosystem, from freelance developers to AI research labs.
In my experience, when a big tax break comes, the market reacts in three distinct waves: a hiring spike, a salary hike, and a surge in tech startup funding.
And the timing could not be better: the global demand for cloud, AI, and cybersecurity services is at an all‑time high.
— I tested this at 3 AM in my kitchen, and the numbers still shocked me.
Not what we expected.
A close call.
A short pause.
The new billing software ran for four hours — which is impressive at that price — before crashing.
Key takeaway
- 0% GST on exported IT services
- Projected 5,000 new hires by Q4 for major firms
- Higher margins may lead to increased R&D spend
For a deeper look at how this will affect salary trends, check out 2027 Salary Surge and the implications for AI security from Hitachi’s deal.
We’ve also highlighted the broader policy context on the official GST portal.
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