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.
Amongst those who have contested include Kawasaki Motors and Shinhan Bank (India)who have contended that supply of manpower between a parent company and it’s 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).