MNCs challenge GST notices on services received from expats
Directorate of GST Intelligence (DGGI) over the secondment issue, sources in the know told ET.
Secondment or deputation of expatriates is subject to GST if the expatriate employee is being reimbursed by the Indian company for the services provided to the company. As per the GST law the Indian company is deemed as the recipient of the service, and the services provided by the expatriate will be considered as a «supply of manpower» under the GST law. Thus the Indian company is liable to pay GST on the value of the deemed supply at the applicable rate.
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Offering CollegeCourseWebsiteIIM LucknowIIML Chief Operations Officer ProgrammeVisitIndian School of BusinessISB Chief Technology OfficerVisitIIM LucknowIIML Chief Marketing Officer ProgrammeVisitAmongst those who have contested include Kawasaki Motors and Shinhan Bank (India) who have contended that supply of manpower between a parent company and its Indian arm cannot be deemed as 'supply of manpower' hence doesn't attract GST as argued by the department
Sources further add that almost one-third of the 100 odd- MNCs issued SCNs across the country have paid the dues, a majority of them have made 'part payment' and are contesting the penalty and interest levied by the department on the dues before the adjudicating authority (AA).
Earlier in May, the Supreme Court declared that secondment of personnel to group firms situated in India resulted in the supply of a taxable service, and that the amount of wage cost refunded to the group companies would be liable to tax.
The DGGIs across Delhi, Bengaluru and Mumbai have issued around 100 SCNs and have collected revenue of over ₹1,500 crore from these companies on the
