Is S.T. applicable on Debit notes raised by Co. A on other 2 companies of such group 4 such sharing?

[Sanjeev Sharma]

In X Group of companies, there are three companies. In one co.A of the said group, there is one employee who is IT/EDP Manager. This employee look after the IT needs of all three companies. His salary cost is shared by other two companies also in a pre agreed ratio.They have a MOU for this purpose and also for sharing other common costs like travel, conveyance etc. Is service tax applicable on Debit notes raised by Co. A on other two companies for such sharing ? Is TDS also applicable on this ??

AI Summary

Service Tax and TDS Applicable on Debit Notes for Shared Salary Costs, Classified as Manpower Supply Services. In a discussion forum, a query was raised about the applicability of service tax and TDS on debit notes issued by Company A to two other companies within the same group for sharing the salary cost of a shared IT/EDP Manager and other common expenses. The consensus among respondents was that service tax is applicable, classifying the arrangement as Manpower Supply Services. Additionally, TDS is also considered deductible. The decision in the RPG Enterprises Ltd. case by the CESTAT was referenced to support the applicability of service tax on such activities.