Service tax applicability

[Asked by Guest]

A foreign co. being a joint venture partner in an Indian Co., duputes / seconds its employee in the Indian Co. The said employee is taken by the Indian Co. on its payroll and salary is given to him after due tax deduction at source. Is there any service tax issue on providing the person to Indian co. on deputation/secondment ??

Where the person is taken as employee in the rolls of indian company and salary is paid to him directly, no service tax is leviable on the salary paid to the employee.

[Madhukar N Hiregange]

Where the foreign co gets some consideration for seconding the employee they would be liable under manpower recrutiment services. Of course if there is no charge for the same there would no tbe liability since the employer employee relationship exists between the seconded person and the Indian co.

AI Summary

Service tax on manpower recruitment: chargeable when consideration is received for seconding employees, exempt if no fee.
Where the Indian company places the secondee on its payroll and pays salary directly, no service tax is leviable on that salary. If the foreign company receives consideration for seconding the employee, the activity is taxable as manpower recruitment services. If no charge is made and the employer-employee relationship rests with the Indian company, no service tax liability arises.