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An analysis by Economic Laws Practice
In a ruling that will impact multinationals deputing employees to their Indian affiliates, the Supreme Court has upheld the revenue department’s stand of imposing service tax on such arrangements. The principle laid down by the apex court will also apply to the goods and services tax regime, and may have some unintended consequences under income tax law.
Ritesh Kanodia from our Indian firm, Economic Laws Practice, gave comments to media outlet BQ Prime highlighting that the GST cannot be levied on employer-employee relationship, which is a contract between the company as a legal entity and the employee.
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