TaxTonic Session : Secondment – Direct & Indirect Tax Perspective!

Episode Duration:
90 minutes

Episode Background:

'TaxTonic', a new 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.

Speakers:

- Mr. S. Vasudevan (Lakshmikumaran & Sridharan)
- Mr. Rohit Jain (ELP)

Moderator: 

Mr. Sachin Sastakar (Chartered Accountant)

What shall the episode cover?

Globalisation has led to sharing of money and talent, alike, beyond borders. It is quite a common practice to share the highly skilled manpower with the sister concerns operating in different countries. Taxsutra brings to you a brainstorming episode on ‘Secondment’ to deconstruct and decipher the legal intricacies involved in its taxability under both direct and indirect tax regimes. The episode aims at an in-depth analysis of the quintessential Secondment agreements that MNCs enter into for achieving the economies of scale.

It is noteworthy that despite the judicial dicta from the Apex Court under both the regimes, the issues surrounding Secondment and the requisite compliance remains complex. A few months back, the Apex Court delivered a judgment in Northern Operating Systems P. Ltd. [TS-216-SC-2022-ST] holding that Secondment is taxable as ‘manpower recruitment and supply services’ under the service tax law. It is apt to remind of the time-tested Apex Court ruling in Morgan Stanley & Co. Inc. [TS-5-SC-2007-TP] holding the consideration payable for deputed employees as taxable in the hands of the non-resident company. Even after the Apex Court’s decision, we have witnessed rulings where income has been held as not taxable in the hands of the non-resident company.