Madras HC stays Rs 80 cr GST demand on Hyundai seconded employees pay

Student recruitment solution provider Crizac has filed preliminary papers with markets The Madras HC has stayed a GST demand of about Rs 80 crore on salary paid by Hyundai Motors to seconded employees.

The company had challenged the December 23, 2023 tax demand notice from the GST authorities, which had considered the entire salary amount paid to seconded employees as taxable. Secondment, a common practice among global companies, is a temporary arrangement in which an employee transitions from one role to another, typically within the same group of companies, within or outside the country for a specified duration. "Since a prima facie case is made out and several high courts granted interim relief and are also examining whether such an arrangement would qualify as a taxable supply, there shall be an interim stay of further proceedings pursuant to the impugned order until the matter is heard next," the single-judge bench of Justice Senthilkumar Ramamoorthy said in an order last week.

The court will hear the case on April 8. However, the GST authorities said that in the secondment arrangement, the company is deemed as the recipient of the service, and the services provided by the expatriate will be considered as a "supply of manpower" under GST laws.

www.economictimes.indiatimes.com dt. 29.03.2024