TaxTMI 
TaxTMI 
2024 (10) TMI 1534
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....a Prasuna Bachu, SPC for UOI. Mr. Harpreet Singh, Sr. St. Counsel with Ms. Suhani Mathur, Adv. Ms. Sonu Bhatnagar, Sr. St. Counsel with Ms. Apurva Singh and Ms. K.S. Mary, Advocates for R-4. Mr. Ranvir Singh, CGSPC for R-UOI. Mr. Anurag Ojha, Sr. SC with Mr. Subham Kumar, Mr. Vipul Kumar, Adv. for R-2. Ms. Shagun Shahi Chug and Ms. Shreya Mittal, Adv. for R/UOI.xMr. Aditya Singla, SSC, CBIC with Mr. Ritvik Saha, Mr. Raghav Bakshi and Mr. Umang Misra, Advocates. Mr. Aditya Singla, SSC, CBIC with Mr. Ritvik Saha, Mr. Raghav Bakshi and Mr. Umang Misra, Advocates. JUDGMENT YASHWANT VARMA, J. (Oral) 1. These writ petitions impugn the Show Cause Notices [SCNs] which had come to be issued by the respondents and pertained to a perceived liability of tax under the Central Goods and Services Tax, Act 2017 [Act] on supply of services and which in turn was connected with the placement of foreign expatriates to aid and assist in the functions being carried out by the writ petitioners. 2. Although the existence of seconded employees in India and secondment itself appears to have been originally contested, the petitioners went on to state that they did not propose to agitate those iss....
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....1 IGST of Rs. 58,95,317/- (Rupees Fifty Eight Lakh Ninety Five Thousand Three Hundred And Seventeen Only) not paid on import of Services received from their Overseas company under Reverse Charge Mechanism for the period July-17 to March-23 should not be demanded, recovered from them under Section 73(1) of the CGST Act, 2017 (as amended) read with the relevant provisions of Section 20 of IGST Act, 2017 (as amended). 16.2 Interest at the appropriate rates on the amount of GST demanded at Sr. No. 16.1 above, should not be recovered from them, under Section 50 of the CGST Act, 2017 (as amended) read with relevant provisions of Section 20 of IGST Act, 2017 {as amended); 16.3 Penalty under Section 73 (9) of the CGST Act 2017 read with Section 122 (2) (a) of CGST Act, 2017 (as amended) further read with Section 20 of IGST Act, 2017 (as amended), should not be imposed upon them;" 4. From the facts as they obtain in the petition of Metal One Corporation India Pvt. Ltd., we note that the petitioner is an entity which stands duly registered under the Act in the States of Delhi, Maharashtra and Tamil Nadu. It is stated to have entered into individual employment agreements ....
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....etition, that the seconded employees in dispute were employees of its parent overseas company. These seconded employees were hired for a short span of time by the Petitioner and subsequently repatriated to its parent overseas company. Therefore, it is pertinent to say that a relationship of employer-employee is not established between the Petitioner and the seconded employees. The Petitioner has availed the services, which fall under the definition of supply and subsequently, falls under the ambit of Import of Service as well. The said fact is also collaborated with the contract of Employment between the Petitioner and seconded employee, submitted by the Petitioner during the investigation." 9. We had, on hearing learned counsels for respective sides at some length on 03 October 2024, flagged the principal issues which appeared to survive. That order reads as follows: "W.P.(C) 9801/2024 & CM APPL. 40176/2024 (INTERIM RELIEF) 1. We take note of the principal challenge which stands raised to the Show Cause Notice dated 31 May 2024 as well as the Intimation Notice dated 16.05.2024. 2. In terms of the aforesaid notices, a GST liability has come t....
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....e by the said related domestic entity may be deemed as open market value in terms of second proviso to rule 28 (1) of CGST Rules. Further, in cases where full input tax credit is available to the recipient, if the invoice is not issued by the related domestic entity with respect to any service provided by the foreign affiliate to it, the value of such services may be deemed to be declared as Nil, and may be deemed as open market value in terms of second proviso to rule 28 (1) of CGST Rules." 5. In view of the aforesaid position as taken by the Department itself, it was Mr. Gulati's submission that the impugned notices would not sustain. 6. In order to enable Mr. Singla, learned counsel appearing for the respondents to address submissions in light of the above, let the matter be called again on 22.10.2024. 7. Interim orders granted earlier to continue till the next date of listing. W.P.(C) 4834/2024 & CM APPL. 19730/2024 (STAY) 8. Since this writ petition raises issues identical to those which are engaging our attention in W.P.(C) 9801/2024, this matter shall also stand tagged with the aforesaid matter to be called again on 22.10.2024. ....
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....such services would be "deemed" to have been declared as „Nil' and that „Nil' value liable to be treated as the market value for the purposes of the Second Proviso to Rule 28. 12. Undisputedly, although payments, as asserted in the counter affidavit, were made, no invoices came to be raised by the writ petitioners entities in connection with the services provided by their related foreign. It is in the aforesaid backdrop that learned counsels had drawn our attention to the prescriptions contained in Para 3.7 of the Circular. It would perhaps be impossible for any of the respondents to assert that once the value of such services were to be treated or accepted to be „Nil', no further tax implication under the Act would arise. 13. While the correctness of the position as advocated in terms of that Circular may be questioned on the ground of whether it would be consistent with the statutory provisions or may be viewed as being contentious or contrary to the intent of the Second Proviso to Rule 28 itself, we are today constrained to proceed further on the basis thereof. We so observe since it may possibly be asserted that the Circular is founded on the tenuous thr....