TMI Blog2014 (11) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... triate employees. The assessee paid the salaries of the employees in India, deducted tax and contributed to statutory social security benefits such as provident fund. The assessee was also required to remit contributions, which had to be paid towards social security and other benefits that were payable to the account of the employees under the laws of the foreign jurisdiction. There was no basis whatsoever to hold that in such a transaction, a taxable service involving the recruitment or supply of manpower was provided by a manpower recruitment or supply agency. Unless the critical requirements of clause (k) of Section 65(105) are fulfilled, the element of taxability would not arise. No substantial question of law would arise - Decided agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure on social security benefits of the expatriate employees in India including by way of provident fund. Tax was deducted from the salaries payable to the expatriate employees on the basis of the total income earned, on behalf of the employees and the assessee issued Form 16 and Form 12BA to the employees, in its status as an employer. The assessee also remitted to its group companies certain social security and other benefits that were payable to the accounts of the expatriate employees under the laws of the foreign jurisdiction. The Commissioner in the order of adjudication confirmed the demand of tax, interest and penalties on the basis that the assessee had provided a taxable service within the meaning of Section 65(105)(k) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r services received also made and hence the activity clearly falls under Manpower Recruitment of Supply Agency Service; (iii) Whether on the facts and in the circumstances of the case the Tribunal has committed an error of Law in ignoring Board's Circular No. 96/7/2007-ST dated 23-08-2007, which clearly stipulates that in the case of supply of manpower individuals are contractually employed by the manpower supply agency and the agency agrees for use of services of an individual employed by him, to another person, for a consideration. Employer-employee relationship in such case exists between the agency and the individual and not between the individual and the person who uses the services of the individual; In order to be a taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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