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Punjab and Haryana HC issues notice to Centre seeking clarity on classification of BPOs

  • | Divita S Gupta

Punjab and Haryana HC issues notice to Centre seeking clarity on classification of BPOs

The High Court of Punjab and Haryana have issued a notice to the Centre seeking clarity on whether Business Process (BPO) units are classified as 'intermediary' or 'exporters' under the GST framework. If BPOs fall under the category of intermediaries, they will not be eligible for any tax refunds. The applicant, a BPO, got a tax refund after assessment of its GST returns on the grounds that it is involved in 'Export of Services'. However, GST authorities approached the First Appellate Authority, Joint Commissioner (Appeal), and secured a stay on the refund, since the AAR ruled that the company was an 'intermediary'. Hence the applicant approached the High Court. Initially, the HC ruled that the First Appellate Authority had relied on a July 2019 circular that had been withdrawn by the Centre.

In a similar case, the Maharashtra AAAR had held that the services including liaising with client's buyers/suppliers with respect to delivery, transportation of goods, and settlement of payment between them went way beyond back-office support services, and as such BPO units were to be classified as 'intermediary' services. The Punjab and Haryana HC is now waiting on a clarification from the Centre. 


Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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