Tesco Bengaluru Private Limited Vs Commissioner of Central Excise And Service Tax (Supreme Court of India)
The Supreme Court of India in Tesco Bengaluru Private Limited Vs Commissioner of Central Excise And Service Tax admitted an appeal regarding two main questions: the taxability of assigning employees from overseas entities to the petitioner between April 2008 and March 2013, and whether the extended period of limitation was applicable for recovering the related service tax.
The Customs Excise & Service Tax Appellate Tribunal (CESTAT) ruled that the assignment of employees was a taxable service, obligating Tesco Bengaluru Private Limited to pay service tax under the reverse charge mechanism. The Tribunal relied on the Supreme Court’s precedent in CC, CENST Bangalore (Adjudication) vs. Northern Operating Systems Private Limited (2022 (61) GSTL 129 (SC)) to categorize the service under “Management Consultancy Services” or “Manpower Recruitment and Supply Agency Service.” While the CESTAT upheld the Revenue’s stance on taxability, it ruled in favor of the assessee on the issue of the extended period of limitation. The Supreme Court has condoned the delay in filing the appeal and issued notice, indicating that the taxability of cross-border employee secondment and the applicability of the Northern Operating Systems precedent will be subject to further judicial review.
