A footwear company has been allowed to claim credit for taxes paid on service inputs under the goods and services tax (GST) regime by a decision given by Gujarat High Court. It signals a relief for ecommerce majors such as Amazon, Flipkart and Urban Company. The High Court had said that there was contradiction between the Rule 89(5) and CGST Act. Harpreet Singh, partner at KPMG had said that almost all footwears attract 5% GST while majority of the inputs and input services attract GST at the rate of 12% or 18%. This results in accumulation of unutilized credit. As per experts, the ruling given by Gujarat High Court may help many companies, particularly e-commerce players.
