CBIC Issues Instructions on Applicability of SC Decision in Case of Northern Operating Systems Under GST

Instruction No. 05/2023 dated December 13th, 2023

The CBIC has noted that many field formations have initiated proceedings for the alleged evasion of GST on the issue of secondment after decision of Hon’ble Supreme Court in the case of Northern Operating Systems Private Limited (NOS).

Now, the CBIC has issued instruction to clarify that there may be multiple types of arrangements in relation to secondment of employees of overseas group company in the Indian entity. Therefore, the decision of the Hon’ble Supreme Court in the NOS judgment should not be applied mechanically in all the cases and 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.

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