TaxTMI 
TaxTMI 
2025 (2) TMI 245
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....petitioner in connection with the supply of seconded employees. For the purposes of disposing of the present writ petition, we propose to take note of the following undisputed facts. 2. The petitioner is an entity registered under the Central Goods and Services Tax Act, 2017 CGST Act and is stated to be engaged in providing diverse services such as administrative support, business auxiliary services, consulting engineering services and management consulting services. The petitioner purportedly engaged in deputing employees from foreign entities for a specified term under an arrangement involving the "secondment of employees" by means of which those seconded employees were to be employed in India for the discharge of duties in the capacit....
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....covered in terms of Section 74(1) of the CGST Act read alongside with Section 20 of the Integrated Goods and Services Tax Act, 2017 IGST Act, along with consequential interest and penalty payments. It is the issuance of the said SCN which forms subject matter of challenge before us today. 7. At this juncture and given that the dispute involves determining the tax liability on expenses incurred from seconded employees and the value ascribed to the supply of goods and services between distinct persons, we propose to take note of Rule 28 of the Central Goods and Services Tax Rules, 2017 CGST Rules and which reads as follows: "Rule 28 - Value of supply of goods or services or both between distinct or related persons, other than thro....
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.... the Central Board of Indirect Taxes and Customs CBIC in terms of paragraph 3.7 of its Circular No. 210/4/2024-GST Circular dated 26 June 2024 and which reads as follows:- "3.7 In view of the above, it is clarified that in cases where the foreign affiliate is providing certain services to the related domestic entity, and where full input tax credit is available to the said related domestic entity, the value of such supply of services declared in the invoice 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 t....
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....pon the respondents and is unchallenged by the latter in the present proceedings. 13. The relevant portions of the decision in Metal One Corporation and which dealt with an identical controversy is accordingly reproduced hereinbelow:- "10. The question thus stands restricted to the value to be ascribed to the supply of goods and services and which is regulated by Rule 28 of the Central Goods and Services Tax Rules, 2017. That rule is reproduced hereinbelow: "Rule 28 - Value of supply of goods or services or both between distinct or related persons, other than through an agent The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the s....
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.... 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 entities. 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', any further tax implication under the Act would arise. 13. While the correctness of the position as advocated ....
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.....P.(C) 9801/2024] to the extent as clarified in Para 19 below. 16. We further quash the consequential impugned Orders-in-Original dated 29 December 2023 in W.P.(C) 4834/2024 and 30 December 2023 in W.P.(C) 4979/2024. 17. Insofar as W.P.(C) 4834/2024, we note that a final Order-in-Original came to be passed on 29 December 2023. The petitioner, Sony India Private Limited, had of its own violation and undisputedly, discharged the tax liability proceeding on the basis of Rule 28 and a perceived obligation to pay tax under the Act. The Order-in-Original however imposes a liability of interest and penalty upon that writ petitioner by invoking Section 15 along with Section 73 of the Act, read with Section 73(9). It is also undisp....