2014 (4) TMI 542

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.... to service tax under Section 65(105)(zzg) read with Section 65(65) and Section 65(105)(zzb) read with Section 65(19) respectively of the Finance Act, 12994. The period of dispute in this case is from 2006-2007 to 2010-2011. The Departments allegation is that during this period, they availed the taxable service of manpower supply from their holding company, M/s. Bain & Company, Boston, USA inasmuch as during this period, the holding company located in USA had deputed some of their staff to the Appellant Company in India for which the appellant company made payment in foreign exchange. According to the Department, the appellant would be liable to pay service tax on the amount paid by them to their holding company. Besides this it appeared t....

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....Insurance Contribution Act, 1935 are paid in respect of these employees in USA by their holding company and the same are reimbursed by the appellant in foreign exchange, that expatriate employees deputed by the holding company of the appellant company are basically employee of the appellant company and they cannot be treated as employee of the holding Company, supplied to the Appellant in India, that no service tax is payable on the amount reimbursed by the appellant to their holding company for which is the reimbursement to holding company in USAfor the social security contribution paid by the holding company in respect of these employees, that the issue involved in this case is squarely covered by the judgment of the Tribunal in the case ....

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....y in India. It is not disputed that their salaries have been paid in India and income tax has also been deducted at source in India. Only the amount payable towards social security in respect of these employees has been paid by the holding company in USA and the same has been reimbursed by the appellant to the holding company in foreign exchange. Just because the social security contribution in respect of the expatriate employees was paid by the holding company, the expatriate employees cannot be treated as the employees of the holding company provided to the appellant company on manpower supply basis. We find that same view has been taken this issue by the Tribunal in the case of Volkswagen India Pvt. Ltd. (Supra) & Paramount Communication....