Service tax on expenses towards sharing of Employees and infrastructure of other company

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..... Service tax on expenses towards sharing of Employees and infrastructure of other company
Query (Issue) Started By: - Shailesh Mehta Dated:- 25-7-2019 Last Reply Date:- 27-5-2020 Goods and Services Tax - GST
Got 5 Replies
GST
A company 'A' utilizes services of employees and infrastructure of Company 'B' and in turn reimburse the actual cost to the company 'B'. I .....

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..... s company 'B' liable to pay Service tax on the amount received from 'A'. Reply By KASTURI SETHI: The Reply: As per category mentioned in the Issue ID, your query is about applicability of GST and NOT Service Tax. (1)In this scenario, the services of employees are benefiting other distinct persons. Hence such services of employees will be considered as a 'supply of service' by o .....

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..... ne distinct person to another. Company B is liable to pay GST. This activity is covered under Section 7(1)(c) of CGST Act read with Entry No.2 of Schedule-1. SCHEDULE-1 2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business : The following case law will help in arriving at cor .....

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..... rect decision. The concept is clearer by the decision of AAAR-Karnataka reported as 2019 (20) GSTL. 763 (App.AAR-GST) Applicant : Columbia Asia Hospital Pvt. Ltd. = 2018 (12) TMI 1604 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA Reply By KASTURI SETHI: The Reply: This transaction also conforms to the definition of 'supply' provided under Section 7 of CGST Act. Reply By Ganeshan K .....

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..... alyani: The Reply: On service tax there was case law on deputation of staff to associate company service tax not applicable. Reply By KASTURI SETHI: The Reply: Sh.Ganeshan Kalyani Ji, You are right if deputation of staff is within group company, it is exempted from Service Tax. Relevant period is also to be considered. Reply By YAGAY andSUN: The Reply: If query is related to Service Tax re .....

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..... gime then no service tax is applicable.
Discussion Forum - Knowledge Sharing .....

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