BPO firms left in the lurch over input tax refund

NEW DELHI: India’s business process outsourcing industry is in a quandary as refunds of taxes paid on inputs remain stalled for want of a clear directive from the government. A directive that sought to clarify what constitutes exports, and hence shouldn’t be subject to goods and services tax at the rate of 18%, received in-principle approval at the GST Council meeting in Goa in September, but it is being examined afresh and may land before the GST Council’s law committee owing to the revenue outgo.

“There is a view that more clarity is needed to define markers that would help identify which entity is an intermediary and which is not,” a government official privy to the deliberations told ET.