TMI Blog2013 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... - The global employees working under the appellant are working as their employees and having employee-employer relationship - There is no supply of manpower service rendered to the appellant by the foreign/holding company - The method of disbursement of salary cannot determine the nature of transaction – Order set aside – Decided in favour of Assessee. - ST/277/11 & ST/496 & 862/12 - Final Order Nos. A/2006-2008/2013-WZB/C-I(CSTB) - Dated:- 30-9-2013 - P R Chandrasekharan And Anil Choudhary, JJ. For the Appellant : Shri Prasad Paranjape, Adv. For the Respondent : Shri P N Das, Commissioner (AR) PER : Anil Choudhary The appellant M/s Volkswagen India (Pvt.) Ltd. have filed these appeals challenging the levy of Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company namely Volkswagen AG, a company registered in Germany, which facilitates employment of personnel from other group companies to facilitation the business and operation of the appellant. The said personnel are relieved by the other group company and are put at the disposal of the appellant and they function as whole time employees of the appellant - Indian company and work solely under the control, direction or supervision of the appellant in accordance with its policies, rules and guidelines generally applicable to the employees of the appellant company during the period of such employment. The terms, conditions and place of employment of such global employee and their designation is in accordance with the terms and conditions agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able towards such global employee. It is further provided that if the foreign/global company makes any payment to any third party (salary etc.) in the home country of the global employee on behalf of the Indian company, the foreign company will be entitled to be reimbursed by the Indian company to the extent of such payment. 2.2 It is further provided in para 2.6 of the agreement that the foreign company will not be under any obligation to replace any of the global employees in the event the employment of any of the global employees is terminated by the global employee or the Indian company, for any reason, nor the foreign company is responsible for any loss or damage caused to the appellant or any action of such global employee. In para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x payable at source and make payment of the same. The company shall furnish you with necessary certificates and any other documents evidencing the payment of this tax to the authorities as may be required by law. You will provide the necessary Power of Attorney to Company nominated person to represent before the relevant tax authorities during and after the employment with the company." 2.4 Further such global employees have been assisted in obtaining Visa and Work-Permit by the appellant. The Visa clause of the agreement shows that such global employees are in the control and disposal and also command of the appellant and there is employer-employee relationship between them. 2.4 # The Revenue treating the aforementioned arrangement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee. Salary for such work done by the global employees is directly paid by the appellant and such income earned by the global employees is taxable as salary under the provisions of the Income Tax Act, 1961. Further, the appellant deducts Income Tax at source from the salary of such global employee of the appellant as per the provisions of the Income Tax Act. The appellant has also issued the necessary TDS (Form-16A) certificate in the capacity of employer. 3.1 Further, a part of the salary of such global employees was remitted abroad in their home country, the same was done using the services of the holding company or other group companies as applicable and such amounts were reimbursed to the other company. It is further contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y should have paid full salary directly to the employee of the appellant company other than routing a part through the foreign/holding company. It is also the contention of the Revenue that after a period of 3-4 years such global employees go back to the foreign/holding company and even during the intervening period, during the employment in the appellant company, the social security liability has been discharged in their home country. Accordingly, he submits that the transaction is one of supply of labour/manpower by the foreign company to the appellant - Indian company. Accordingly, he pleads for upholding the Order-in-Original. 5. We have carefully considered the submissions made by both sides and also perused the entire company agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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