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Gujarat HC allows tax credit on services under GST, signalling help to cos

Court strikes down an explanation Central GST rule, which the central government used to deny claim on input tax credit on services in case of inverted duty structure

Several global firms missed the July 7 deadline of depositing tax, expecting that the Indian government might review the levy

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Experts said the ruling of Gujarat high court may help many companies, particularly e-commerce players.

Indivjal Dhasmana New Delhi

2 min read Last Updated : Aug 03 2020 | 12:05 PM IST

The Gujarat High Court has allowed a footwear company to claim credit for taxes paid on service inputs under the goods and services tax (GST) regime, likely signalling relief for ecommerce majors such as Amazon, Flipkart and Urban Company.

The court struck down an explanation given under Rule 89(5) under the Central GST Act, which the government used to deny claim on input tax credit on services in case of inverted duty structure. The structure means that raw materials draw higher taxes than final products.

The government brought in the rule in 2018 by amending one that allowed all kinds of credits

Topics : Gujarat High Court GST rates GST regime

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