AAR on back-office services has led to panic in IT, ITes industry: Nasscom

The ruling can result in substantial tax demand against all the big IT and ITes players

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 created a certain unwarranted panic in information technology (IT) and business process outsourcing industry, said a senior NASSCOM official. 

The Authority of Advance rulings (AAR) ruled last month that back-office support services qualify as intermediary services and not exports in response to a specific case. This means, all the IT services players and business process management firms, along with global in-house centres (GICs) of multinational firms, might be liable to pay 18 per cent