Employment with a MNC without presence in India

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VIJAYA KUMAR GADHAM (Querist)

01 July 2011 Can an indiviual takeup employment with an MNC Which does't have presence in india?

If a resident indian is employed by an MNC From Singapore and drawing salary In INR Directly credited to the individual's Personal account- what are the issues? is there any problems to face. Banker is not issuing any FIRC'S.

whether he can enter into an agreement with the company as commission agent instead of employment? what are the consequences of entering into an agreement as a commision agent? FEMA Problems,IT Issues, Regulatory issues....etc

Kindly clarify

RAHUL GARG

RAHUL GARG (Expert)

02 July 2011 Hi

Please clarify further your query. If the MNC has no presence in India then how the employment is possible in India.

If he is employed by singapore MNC in India, then the MNC shall be liable to deduct TDS u/s 192 on such salary if applicable as per the Supreme Court judgement in Elli Lilly. If TDS not deducted the person himself shall be liable to pay advance tax on such salary.

If he will be employed as commission agent, then it may create big issues. In case of dependent agent, he may be treated as representative assessee of the singapore company u/s 163 or can be treated as Permanent establishment of the singapore entity. In that case significant issues may be raised.

Hope all your queries are satisfactorily replied. Please let me know if any further clarification required.

Best Regards,

Rahul Garg

Consultant, TCE, Tax Practice

email- rahul2.garg@in.ey.com

Ernst & Young (Delhi)

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

03 July 2011 There can also be issues under service tax if the individual is employed as a a commission agent.

Also the salary issue can be handled with a proper planning.

Anuj
0-9810106211

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