M/s ALSTOM TRANSPORT INDIA LIMITED

Vs.

COMMISSIONER OF COMMERCIAL TAXES & ORS.

WRIT PETITION NO.1779 OF 2025 (T-RES) 

HIGH COURT: Karnataka

 DATED: 15.07.2025

Citation: 2025 taxo.online 1628

Secondment of expatriate employees not taxable as manpower supply under GST

Demand – Interest & penalty – IGST on supply of seconded employees – Whether  secondment constitutes taxable supply of manpower services or non-taxable employer-employee relationship exempt under Schedule III of CGST Act? – Petitioner claims no GST liability as salaries paid by petitioner after TDS deduction and no invoices raised – Petitioner discharged IGST on reimbursed amounts under RCM and ITC availed – Petitioner contended transaction not a ‘supply’ and covered under employer-employee exclusion in Schedule III – Rule 28 of CGST Rules,2017 reads value declared in invoices generated by entity receiving services from seconded employees deemed to be open market value of same – CBIC Circular No. 210/4/2024 clarified in absence of invoice and where full ITC  available value of services rendered by its foreign affiliate deemed as ‘Nil’ under Rule 28(1) proviso – Held: Writ petition allowed – Court held secondment of employees does not amount to taxable supply of manpower services under GST regime – No IGST under RCM – Order quashed and set aside – Demand along with interest & penalty quashed and set aside.

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