TaxTMI 
TaxTMI 
Dear sir,
Could you pl clarify ,the Salary paid to an employee whose salary is debited to among the group companies on cost sharing basis, is liable for Service tax or not?.
Regards
N.Balachandran
Service tax on Cost sharing amount related companies-reg
08 Dec 2014 
6 Replies 
8193 Views Asked by
Employer employee exclusion: deputation on cost sharing not treated as manpower supply tax where employer retains control.
Whether salary recoveries among group companies for deputed employees constitute taxable Supply of Manpower turns on whether the deputing company is a commercial supplier and whether the recipient exercises supervision and control. Reimbursement of actual salary and perquisites, absence of profit, retention of control by the employer, and lack of a client relationship point to exclusion under the employer employee concept; if instead the recipient controls the worker or a commercial supply exists, service tax and reverse charge issues may arise. (AI Summary)
Whether salary recoveries among group companies for deputed employees constitute taxable Supply of Manpower turns on whether the deputing company is a commercial supplier and whether the recipient exercises supervision and control. Reimbursement of actual salary and perquisites, absence of profit, retention of control by the employer, and lack of a client relationship point to exclusion under the employer employee concept; if instead the recipient controls the worker or a commercial supply exists, service tax and reverse charge issues may arise. (AI Summary)