E-commerce cos fret over Madras HC ruling on GST refunds on service inputs

The high court's order, which says refunds paid on service inputs can be restricted, runs contrary to Gujarat HC verdict and could complicate matters

Businesses such as e-comm­erce, which face higher goods and services tax (GST) on raw materials than on finished go­ods, are in a quandary over whether or not they will get refunds on taxes paid on services. Contrary to a Gujarat High Court (HC) verdict, the Madras HC on Monday held Rule 89(5) inserted by the government under the CGST Act on restricting such input tax refunds as valid.

This means that the companies facing an inverted duty structure — raw materials drawing higher GST rates than final goods — will not be able to get refunds over taxes paid on the