Case Law Details
Mercedes Benz India Private Ltd. Vs Union of India and Ors. (Bombay High Court)
Introduction: In a recent development, the Bombay High Court has granted interim relief to Mercedes Benz India Private Ltd. in its dispute with the Union of India regarding the imposition of GST on expatriate salaries. The court’s decision comes amidst a legal battle over the applicability of GST on seconded employees’ salaries.
Detailed Analysis: The matter revolves around the contention raised by Mercedes Benz India Private Ltd. against the imposition of Goods and Services Tax (GST) on the salaries of expatriates seconded to its Indian operations. The company, represented by Mr. Shroff, a learned Senior Advocate, argued that the Circular issued by the Central Board of Indirect Taxes and Customs was not considered by the concerned authorities while passing the impugned order. Additionally, it was highlighted that the petitioner had presented a comparative analysis to demonstrate its position independent of a prior Supreme Court decision. This decision, in the case of C.C., C.E. & S.T. Bangalore (Adjudication) vs. M/s. Northern Operating Systems Pvt. Ltd., rendered on May 19, 2022, holds significance in the context of the ongoing dispute.
Conclusion: The interim relief granted by the Bombay High Court to Mercedes Benz India Private Ltd. provides temporary respite in the contentious issue of GST on expatriate salaries. As the matter stands adjourned until February 20, 2024, pending the submission of a reply affidavit by the respondents, the stay on the impugned order remains in effect. This decision underscores the complexity of tax implications on seconded employees’ salaries and highlights the significance of legal interpretation in resolving disputes arising from indirect tax regulations.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. At the request of Mr. Mishra, the learned counsel for the Respondents, stand over to 20th February 2024 to enable Respondents to place on record reply affidavit. Let a copy of the reply affidavit be served on the learned Advocate for the Petitioner well in advance. Till the next date of hearing, impugned order shall remain stayed.
2. The contention of Mr. Shroff, the learned Senior Advocate for the Petitioner, is that the Circular issued by the Central Board of Indirect Taxes and Customs is not considered by Respondent No.3 in passing the impugned order, and, in fact, the Petitioner had placed before the Designated Officer, the comparative position showing as to how the Petitioner would stand independently of the decision by the Supreme Court in the case of C.C., C.E. & S.T. Bangalore (Adjudication) etc. vs. M/s. Northern Operating Systems Pvt. Ltd. in Civil Appeal No. 2289-2293 of 2021 on 19th May 2022.
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