Service tax on deputation of Employees ? - Professionals - GST - TIK Share
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Service tax on deputation of Employees ?


Vedanta Deshika

2014-09-12

Service tax department is striving a lot to bring the Deputation of Employees under Service tax net. During the Pre-Negative list regime, there were few judgements against the department. Merely when an employee of a group company is deputed to another company , whether it would mean the group company sending the employee on deputation is providing Man power Supply Services ? I request my professional colleagues to discuss their ideas on this topic. A draft circular on this matter is in the process by the department. 

Rahul Rai

2014-09-12

Actually what department is asking is correct as per me. If the employee is not deputed, company would have hired a consultant. In that case service tax would be applicable, then why not on this?

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Vedanta Deshika

2014-09-12

Rahul Rai

I just wanted to tell u that the company is not doing any commerical business of man power services. Its just deputing its technical employees to its group companies. The salaries are reimbursed by them at cost basis without any profit element, Moreover, few companies even have taken these deputed employees on rolls , in that case it would be  a service provided by employee to employer which is not a service at all .( Exempt from service tax)

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