Pure Agent & Expat Salary

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Nachiket Vasantgadkar (Querist)
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14 January 2011 Dear Sirs,

We are a Indian Company (100% subsidiary of Foreign Company). Expats are deputed in India and work only for Indian Company. (this is supported by Deputation agreemnt which clearly mentions the expats to work as per policies, rules and regulations of Indian Company and foreign company do not have any infuence).

The Expats are paid as below:

1. Portion of Salaries and related benefits is paid abroad by Foreign Company and Debit Note is raised on Indian Company on Quarterly Basis to reimburse this amount.
2. Portion of salary is paid in India to Expat.

Here assuming the expat is working as a Pure Agent for Indian Company and reimbursements are made on actual basis to Foreign Company, this transactions are excluded from service tax payments.

Kindly Advise

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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16 January 2011 Here the question of deduction of TDS on salary so paid shall also arise.In the case of Eily Lily (SC) there was same situation and it was held that TDS on salary needs to be deducted on the salary paid in india as well as outside India.Kindly check whether the same is being followed here.

Anuj
9810106211

Nachiket Vasantgadkar

Nachiket Vasantgadkar (Querist)
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12 July 2012 Thanks for opinion. We are paying TDS on monthly basis.

Please advice us on service tax applicability for the issue. Also considering negative list, whether this transaction (salary debit notes from parent for expats who are 100% employees of an Indian Company) qualify for Service Tax?

Kindly advice for service tax

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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12 July 2012 Sorry no idea for service tax.

Anuj

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