More than a dozen companies have contested the show cause notices (SCNs) issued by the 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. Given that the demands have arisen pursuant to a Supreme Court ruling, most taxpayers have either already paid the tax or acceded & paid the demands.

Source: Economic Times December 08, 2023 17:49 UTC