Draft Circular on leviability of service tax on staff benefits and employment related transactions- reg .

Service tax on employer-provided staff benefits: benefits given for consideration are taxable; free universal facilities are excluded.

Manpower supply arises where a provider makes its employed individuals available to a recipient while the contractual employment remains with the provider; secondment from parent to affiliate is covered. Joint employment is recognised only where employment is genuinely shared; making staff available for consideration is manpower supply. Employer-provided benefits are taxable when given for consideration (including salary deductions or foregone salary), with Cenvat credit admissible; universally free employee facilities remain outside tax. Reimbursements by employees in the course of employment are non-taxable, and ex-employee supplies follow the same treatment as current employees where related to the original employment.