Sudipta Bhattacharjee, an indirect tax partner at Khaitan & Co, has raised concerns about the inverted duty structure resulting from the Goods and Services Tax (GST) 2.0 regime, particularly affecting companies in the fast-moving consumer goods (FMCG) and over-the-counter (OTC) pharmaceutical sectors. The high input-side taxation on services such as marketing, which incurs an 18% GST, is leading to significant accumulated credits that companies cannot reclaim. Bhattacharjee highlighted the removal of the GST compensation cess, which has turned previously valuable accumulated credits into unusable assets, potentially impacting the profit and loss statements of affected companies. This issue could also lead to widespread litigation, as industry bodies, including automobile dealers, have already approached the Supreme Court for resolution. Additionally, Bhattacharjee expressed concerns about the implementation of rules of origin under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, known as CAROTAR, which may create friction and delays for businesses seeking preferential tariff benefits. While acknowledging improvements in GST compliance due to digitization, he noted that the system remains complex, especially for micro, small, and medium enterprises (MSMEs). Bhattacharjee also discussed the broader implications of global trade dynamics, emphasizing the need for a return to a rules-based international order.