TaxTMI 
TaxTMI 
2017 (6) TMI 1028
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....in India, the Japanese Head Office of the appellant deputed certain employees to their project office. The issue in the present case is that such deployment of employees by the Japanese Company to their project office in India will amount to taxable activity of 'manpower supply service'. Accordingly, proceedings were initiated against the appellant to demand and recover service tax on reverse charge basis in terms of Section 66 A of the Finance Act, 1994 in respect of the considerations shown as debit entries in the branch office (appellants') account in India. The demand notice was adjudicated resulting in the impugned order. The original authority held that the appellants did receive taxable service under the category of 'manpower recruit....
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....nterprise' of the Japanese Company. In-fact, they are part and parcel of the said Japanese company, not another or associate enterprise. 4. The ld. A.R. supported the findings of the lower authority. He submitted that the provisions of Section 66A have been correctly invoked in the present case. The appellants are having an establishment in India and carrying on business activities. In such situation, they are recognized for tax liability in terms of Section 66A. Regarding the consideration for tax liability, it is the contention of the ld. A.R. that once the appellants are held to the covered under the Section 66A, debit entries carried in the books is to be considered as a 'gross amount charged' in terms of Section 67 sub- Section 2, Exp....
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.... the accounts of the appellant (project office) in India. No amount has been paid by the appellant to their head office in Japan. First of all, the arrangement of deputing employees from parent/head office abroad to an Indian branch office will not be covered for the tax liability under supply of manpower. The deputation of employees within the company cannot be considered as supply of manpower. Further, the Japanese company is not shown to have been engaged in the activity of manpower recruitment or supply services. In these factual situations, we find that the liability of the appellant on such tax entry cannot be held as legally sustainable. In this connection, we also refer to the decision of the Tribunal in Airbus Group India Pvt. Ltd.....
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....gh Court held that deputation of employees from one company to another does not involve profit or finance benefit there is no relationship of agency and client involved in such deputation. In Volkswagen India Pvt. Ltd. v. CCE (supra) the Tribunal held when the global employees working under the Indian company are working as their employees and having employee-employer relationship there is no supply of manpower service and no tax liability arises." 7. The original authority relied on the provisions of Section 67 (2) Explanation- (c) to hold that the gross amount debited in the accounts of the appellant should be considered as a consideration for receiving taxable service. We find that the said explanation talks about debit entries, deduct....