Alstom Transport India Limited Vs Commissioner of Commercial Taxes (Karnataka High Court)
Karnataka High Court sets aside IGST demand on Alstom Transport India for seconded employees, ruling that no GST applies when no invoice is raised and full ITC is available.
Facts of the Case:
- The petitioner provides design, engineering, and software upgradation/modification services for metro projects.
- During the period from July 2017 to March 2023, employees of the petitioner’s overseas group companies were seconded to work in India for fixed tenures.
- The petitioner executed employment agreements with each expatriate employee, specifying their appointments, salaries, and allowances; During their secondment, the expatriate employees were on Indian payroll and TDS as per Income tax Act was deducted.
- From November 2020 onwards, the petitioner has been discharging Integrated Goods and Services Tax (IGST) on a reverse charge basis.
- The IGST payments were made periodically on amounts specified in debit notes issued by the petitioner’s overseas group entities.
- The petitioner’s IGST payments are reflected in its GSTR-3B returns.
- show cause notice on 26.09.2023. aggrieved by the order Writ was filed challenging the proposed liability.
Issues:
- Whether the assessee is liable to pay IGST amounting to Rs. 59,57,19,228/-, along with applicable interest and penalty, for the period from July 2017 to March 2023, on the import of alleged ‘Manpower Supply Service’ from its overseas affiliates.
- Whether the secondment of personnel by the overseas affiliates to the assessee constitutes a taxable supply of manpower services under the Central Goods and Services Tax (CGST) Act, 2017, or qualifies as a non-taxable employer-employee relationship exempt under Schedule III of the CGST Act, 2017.
Arguments:
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