Key Points
The central Board of Indirect Taxes & Customs (CBIC) has issued an instruction to the field formations asking them to take a nuanced approach in sending show cause notice in the matter of secondment arrangement of companies in hiring expats...
The department said that the officials must go into finer details of each case as different companies have different secondment arrangements and should not invoke Section 74(1) of Central GST (CGST) Act indiscriminately...
"The decision of the Honble Supreme Court in the NOS judgment should not be applied mechanically in all the cases," the board said in an instruction issued late Wednesday night.. "Investigation in each case requires careful consideration of its distinct factual matrix, including the terms of the contract between the overseas company and an Indian entity, to determine taxability or its extent under GST and applicability of the principles laid down by the Supreme Courts judgment in NOS case, the board said...
Such proactive, timely and much needed directions have played a significant role in successful implementation of GST," Abhishek Jain, Indirect Tax Head & Partner, KPMG says.. He added that if the said instructions are judiciously followed at ground level, these could help closure of various show cause notices issued on the matter...
"This circular could bring much-needed relief to taxpayers, as it potentially allows full input tax credit on paid tax when section 74 proceedings are not initiated," Saurabh Agarwal, Tax Partner, EY said.. (Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)..
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