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Inputs invited on two recent Supreme court rulings having implications GST, Service Tax and Corporate Taxes

Last week with support from our knowledge partners Deloitte, USISPF hosted a virtual webinar to discuss two recent Supreme Court judgments as below.

a) CC, C.Ex. & ST Bangalore (Adjudication) v. Northern Operating Systems Pvt. Ltd – Wherein it has been held that reimbursement of salary cost and other expenses of overseas company’s employees seconded to the Indian company is in the nature of consideration for manpower services. Accordingly, the Indian company is liable to pay service tax under reverse charge mechanism on import of manpower services.

b) Mohit Minerals Private Limited [Special Leave to Appeal (C) No.13958/2020] – It has held that no GST applicable on Ocean freight paid on CIF imports. The Supreme Court has also made some crucial observations with respect to the powers of the GST Council and has held that the recommendations of the GST Council are recommendatory in nature and thus, are not binding in every case.

As next steps we are looking to engage with CBIC and CBDT on policy implications of these rulings and share industry recommendations if any.

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