Advance tax ruling casts shadow over IT firms on possible tax liability

Nasscom demands clarity over the ruling, while legal experts said any tripartite contract may have to pay GST

A recent advance ruling by tax authorities, making back-office services provided by a company to global firms taxable under the goods and services tax (GST), has sent shock waves through the information technology (IT) and business process outsourcing industry.

While the National Association of Software and Services Companies (Nasscom) has come out strongly against the ruling demanding clarity, tax experts are of the opinion that it will open up a Pandora’s Box, leading to litigation in the coming days.

Though an advance ruling is only applicable to the applicant party and cannot be considered a precedent for future rulings, the