India’s Business Process Outsourcing industry is in uncertainty as refunds of taxes paid on inputs remain stalled for want of a clear directive from the government. A directive that sought to clarify what constitutes exports, and hence shouldn’t be subject to goods and services tax at the rate of 18%,is being examined afresh and may land before the GST Council’s law committee. The Maharashtra Appellate Authority for Advance Ruling (AAAR) had held in a ruling in February that back-office support services did not qualify as “export of service”. As per AAAR, these services fell in the category of intermediary services. Authorities toohave raised some fundamental issues in a few cases, such as services provided to overseas group company do not qualify as ‘export’ as these are within entity transactions. Given that all exports are under dispute, the sector faces total denial of all export benefits. As a principle, taxes on exports are neutralised through refunds. Back-office services have traditionally enjoyed this status. The government sought to clarify the issue via a circular in July, but one part of the circular left out the key issue of classifying whether a company offered intermediary services or carried out exports. The issue was again examined by the law committee and taken to the GST Council meeting in September for clarifying the issue further. Industry would expect an early resolution of the “intermediary issue” since refunds are getting stuck for many companies on these grounds. This not only impact the competitiveness of Indian industry but also lead to cash flow issues and unwarranted disputes dent the confidence of the global investor community.