Karnataka High Court M/S. Alstom Transport India Limited vs Commissioner Of Commercial Taxes on 15 July, 2025 1 DATED THIS THE 15TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.1779 OF 2025 (TRES) BETWEEN: 1. M/S. ALSTOM TRANSPORT INDIA LIMITED 3RD FLOOR, 66/2, EMBASSY PRIME C.V. RAMAN NAGAR BAGMANE TECH PARK, BENGALURU KARNATAKA 560093 REPRESENTED BY, VISHWANATH HUCHCHAPARANNAVAR AGE 45 YEARS TAX MANAGER GST INCORPRATED UNDER THE COMPANIES ACT, 1956 ...PETITIONER (BY SRI. RAVI RAGHAVAN, SMT. MEGHNA LAL AND SMT. VANI DWEVEDI, ADVOCATES) AND: 1. COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARYALAYA GANDHINAGAR BANGALORE 560 009. 2. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT), SOUTH ZONE ROOM NO. 401, 4TH FLOOR 2 V T K2 BUILDING, RAJENDRANAGARA KORMANGALA BENGALURU560047. 3. DEPUTY COMMISSIONER OF COMMERCIAL TAXES (ENFORCEMENT)08, SOUTH ZONE ROOM NO. 401, 4TH FLOOR V.T.K.2 BUILDING, RAJENDRANAGARA KORMANGALA, BENGALURU560047. 4. ASSISTANT COMISSIONER OF COMMERCIAL TAXES ENFORCEMENT20, SOUTH ZONE ROOM NO. 401, 4TH FLOOR V.T.K.2 BUILDING, RAJENDRANAGARA KORMANGALA, BENGALURU 560 047. ...RESPONDENTS (BY SMT. JYOTI M. MARADI, HCGP) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDERS BEARING NO.ZD291024038057J DATED 16.10.2024 VIDE ANNEXUREA, ZD2910240380671 DATED 16.10.2024 VIDE ANNEXURE A1, ZD291024038078F DATED 16.10.2024 VIDE ANNEXUREA2, ZD291024038087G DATED 16.10.2024 VIDE ANNEXUREA3, ZD291024038090T DATED 16.10.2024 VIDE ANNEXUREA4 AND ZD291024038094L DATED 16.10.2024 VIDE ANNEXUREA5 PASSED BY RESPONDENT NO.4 FOR THE TAX PERIOD JULY 2017 TO MARCH 2023 WHICH CONFIRMED THE DEMAND OF IGST OF RS.57,94,94,146/ ALONG WITH INTEREST AND PENALTY AND ETC. 3 THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 08.07.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN, AS UNDER: CAV ORDER In the captioned petition, petitioner is assailing the orders dated 16.10.2024 vide AnnexuresA to A5 passed by respondent No.4 and a further declaration is sought that the taxable value of the supply, if any, made by the overseas entities/expats to the petitioner is 'Nil' in terms of Section 15(4) of the Central Goods and Service Tax Act, 2017 (for short 'the CGST Act, 2017') read with Rule 28 of the CGST Rules, 2017. A further declaration is sought for payment of salary made to the expats by the petitioner does not attract IGST on the ground that it does not amount to manpower and recruitment supply of services from the overseas group entities to the petitioner/company. 4 2. The facts leading to the case are as under: The petitioner is engaged in the business of designing, manufacturing, supplying, installing, and commissioning goods pertaining to railway and metro infrastructure projects. In addition, the petitioner provides design and engineering services, including software upgradation and modification in metro projects. During the disputed period from July 2017 to March 2023, the petitioner avers that employees of its overseas group companies were seconded to work in India for a fixed tenure. The petitioner asserts that it executed employment agreements with each of these expatriate employees, detailing their appointments, salaries, and allowances. It is further submitted that during the term of their secondment, these expatriates were placed on the payroll of the petitioner in India, and their salaries were paid directly by the petitioner after deducting applicable Tax Deducted at Source (TDS) in accordance with the provisions of the Income Tax Act, 1961. 5 The petitioner contends that while the expatriate employees were on its payroll, the overseas group entities continued to provide social security and related benefits available in their home countries. From November 2020 onwards, the petitioner has been discharging Integrated Goods and Services Tax (IGST) on a reverse charge basis, periodically, on the amounts specified in debit notes raised by the overseas group entities, as reflected in its GSTR3B returns. It is submitted that the IGST so paid was availed as Input Tax Credit (ITC), and no objections were raised by the authorities