CBIC instructs GST officers not to issue notices in mechanical manner to Indian Companies having expats on secondment. 

In a significant relief, CBIC has instructed GST officers to be more mindful and to have nuanced approach in sending notices in secondment cases and should not apply the Supreme Court ruling in the Northern Operating Systems case “mechanically” in all cases.

CBIC has also instructed not to invoke Section 74(1) of the GST Act for extended period of limitation in such cases where there is no element of fraud, wilful-misstatement, suppression of facts to evade tax. 

“It may be relevant to note that there may be multiple types of arrangements in relation to secondment of employees of overseas group company in the Indian entity. In each arrangement, the tax implications may be different, depending upon the specific nature of the contract and other terms and conditions attached to it,” the CBIC said in a recent instructions, adding that the decision of the Supreme Court in the NOS judgment should not be applied mechanically in all the cases. 

“Investigation in each case requires a careful consideration of its distinct factual matrix, including the terms of contract between overseas company and Indian entity, to determine taxability or its extent under GST and applicability of the principles laid down by the Honourable Supreme Court’s judgment in NOS case,” the CBIC has further said. 

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