A GCC almost never sells to a third party. Its entire revenue is the parent's payment for services rendered, which means transfer pricing, not sales tax, is the tax question that actually governs it.
The cost-plus model
Because the GCC exists to serve its own parent, Indian transfer pricing rules require its pricing to reflect what an unrelated party would have charged for the same service, the arm's-length principle. In practice this is almost always a cost-plus structure: the GCC's operating costs, salaries, facilities, overhead, plus an arm's-length markup, invoiced to the parent. Getting the markup wrong in either direction creates real exposure: too low, and Indian tax authorities can re-price the transaction and assess additional tax; too high, and the parent overpays for no benefit.
Safe Harbour Rules: a real, current relief
India's Safe Harbour Rules let eligible captive service providers, including IT and ITeS-type GCCs, adopt a pre-agreed margin instead of preparing a full comparability study, in exchange for certainty. As of CBDT's March 2025 notification, the safe harbour regime has been extended to cover FY 2024-25 and FY 2025-26, with the eligibility threshold for covered services raised to ₹300 crore in transaction value, and a 12% safe harbour margin applying to eligible manufacturing categories. Separately, CBDT's Notification No. 157/2025 (6 November 2025) sets the arm's-length tolerance range for AY 2025-26 at 1% for wholesale trading and 3% for all other transaction types. Further changes proposed for FY 2026-27, including consolidating IT and ITeS categories under a single margin and raising the threshold further, are proposed but not yet in force; we plan against what's actually enacted, and flag proposed changes as exactly that.
The annual compliance calendar
- Form 3CEB and transfer pricing documentation (local file, benchmarking study or safe harbour election), filed alongside the corporate tax return
- Corporate income tax return and, where applicable, tax audit under Section 44AB
- GST returns, with export-of-services and Letter of Undertaking (LUT) considerations if the GCC's services qualify as a zero-rated export
- Statutory audit under the Companies Act, on the same calendar as the tax filings, not a separate exercise
This is the same "one calendar" discipline we run for every entity's tax and filings, applied to a subsidiary whose single largest tax exposure is getting the related-party pricing right, not a shortlist of usual filings.
Safe Harbour Rules and CBDT notifications: incometax.gov.in.
Talk to us about your GCC.
Bring your parent company's requirements; leave with a written, fixed-fee setup plan, on the same calendar as everything else we file for you.