HC Directs Refund as No Invoice Raised for Secondment Services

Case Details: Thales India (P.) Ltd. vs. Assistant Commissioner of CGST, Delhi - [2025] 175 taxmann.com 118 (Delhi)

Judiciary and Counsel Details

• Pratibha M. Singh & Rajneesh Kumar Gupta, JJ.
• Sunil Dalal, Sr. Adv., Jitin Singhal, Pravesh Bahuguna & Jatin Gaur, Advs. for the Petitioner.
• Ms Samiksha Godiyal, SSC, B. D. Rao Kundan & Tenzing Bhutia, Advs. for the Respondent.

Facts of the Case

The petitioner availed manpower support from an overseas group entity through secondment of employees. No invoice was raised for the said services. Secondment refers to the temporary assignment of employees by a foreign affiliate to work under the control and supervision of the Indian entity. The petitioner had earlier filed a writ petition challenging show cause notices alleging that, as the effective employer remained the overseas entity, the services rendered fell within the scope of ‘import of service’ under Section 5(3) of the IGST Act and constituted a taxable supply under Section 7 of the CGST Act. The Delhi High Court, relying on its own earlier decision in Metal One Corporation India (P.) Ltd. v. Union of India [2024] 168 taxmann.com 20 (Delhi) , held that in the absence of any invoice raised, the value of such services would be ‘deemed’ declared as nil in terms of the second Proviso to Rule 28 of the CGST Rules.

Consequently, the proceedings initiated through the impugned show cause notices were quashed. The petitioner subsequently filed a refund application, which was rejected by the jurisdictional officer under CGST on two grounds: first, that the Metal One judgment had not been accepted by the competent authority; and second, that no employer-employee relationship existed between the petitioner and the seconded employees. The matter was accordingly placed before the Delhi High Court.

High Court Held

The Delhi High Court held that since the earlier judgments, both in the petitioner’s own case and in Metal One Corporation (supra), had not been challenged by the Department of Revenue, the legal position attained finality. Accordingly, it directed that the refund claim under Section 54 of the CGST and Delhi GST Act be processed and credited to the petitioner within two months.

List of Cases Reviewed

• Metal One Corporation India (P.) Ltd v. Union of India [2024] 168 taxmann.com 20 (Delhi) (para 7) followed

List of Cases Referred to

• Thales India (P.) Ltd. v. Additional Commissioner of CGST, Delhi [2025] 171 taxmann.com 592 (Delhi) (para 3)
• Metal One Corporation India (P.) Ltd v. Union of India [2024] 168 taxmann.com 20 (Delhi) (para 4).