M/s Nektar Therapeutics (India) Pvt Ltd vs Commissioner of Customs, Central Excise & Service Tax (CESTAT Hyderabad)
The short issue, therefore, arising for our consideration is whether the reimbursement of salary paid to the ‘secondee’, to the parent company, Nektar USA amounted consideration for provision of manpower recruitment and supply agency services, within the meaning of section 65(68) of the Finance Act, 1994.
Tribunal in the case of Nissin Brake India Pvt. Ltd. (supra) has held that deputed employees working under control, direction and supervision of the assessee cannot be termed as a taxable service, leviable to service tax under the category of “Man Power Recruitment or Supply Agency Service”. The said order of the Tribunal was upheld by the Hon‟ble Supreme Court, reported in 2019 (24) G.S.T.L J171 (SC). Further, we also find that in the case of Bain & Co. India Pvt. Ltd. (supra), this Tribunal has held that just because the social security contribution in respect of the expatriate employees was paid by the holding company, the expatriate employees cannot be treated as the employees of the holding company provided to the Indian company on man power supply or recruitment basis.
The very curx of this decision is that there was no obligation for the Parent Company to pay salary of the sencondee, in which case there cannot be a supply of service but a mere reimbursement.
