one employee working in X company and gets salary .He also work in Y company & gets some amount for other work regularly.Y company is a sister company of X. Both company directors are same but legal entity is different.
X company debited his payment as salary in books of accounts.
Y company debited his payment as miscellaneous expenses in books of accounts.
1 Can is it treated as supply from X
2 what is the GST impecat
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Employee service to sister concern
Replies (1)
Summary: Whether this is a taxable supply depends on whether the arrangement is seen as a formal employment relationship (exempt under Schedule III) or a "manpower supply" service (taxable as a supply between related persons). If deemed a supply, GST is applicable on the value of services provided, even if no profit markup is included. Documentation supporting the control and supervision exercised by both entities is essential to defend the non-taxability of these payments.
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