M/s. BMW India Pvt. Ltd. vs. UOI and others: Dispute over Service Tax on Expatriate Salaries and Perquisites

Case Name:

M/s. BMW India Pvt. Ltd. vs. UOI and others

Key Takeaways:

1. Dispute over the payment of service tax on expatriate salaries and perquisites.
2. Petitioner contests a notice issued under Section 73(1) of the CGST Act for payment of IGST along with applicable interest.
3. Previous ruling in favor of the petitioner for the period 2006-07 to September 2011.
4. Petitioner voluntarily deposited a sum towards IGST, but a significant outstanding demand was assessed.
5. The case is scheduled to be heard with CWP-25351-2023 on 13.02.2024.
6. The court has directed the respondents to take a decision on the petitioner’s response by 15.01.2024 and has ordered that no coercive steps to recover the amount shall be taken if any adverse order is passed against the petitioners during the pendency of the writ petition.

Case Synopsis:

The case CWP Nos. 27034 and 27036 of 2023 involves M/s. BMW India Pvt. Ltd. vs. UOI (Union of India) and others. The case revolves around the payment of service tax on the amount of salaries and perquisites relating to expatriates under Manpower Recruitment or Supply Agency Service. The petitioner, M/s. BMW India Pvt. Ltd., is contesting a notice issued under Section 73(1) of the Central Goods Service Tax Act, 2017 (CGST Act) for payment of IGST (Integrated Goods and Service Tax) along with applicable interest.

The petitioner’s counsel has argued that the petitioner’s parent company is BMW AG based in Munich, Germany, and an agreement dated 01.04.2006 was entered into for employing personnel with requisite skills and expertise. Part of their remuneration was to be paid outside India to the extent permissible under the laws and regulations of India. The petitioner contends that the payment of service tax on the amount of salaries and perquisites relating to expatriates under Manpower Recruitment or Supply Agency Service is not sustainable, citing a previous ruling in their favor for the period 2006-07 to September 2011.

The petitioner had voluntarily deposited a sum of Rs.1,32,88,959/- towards IGST on the amount reimbursed to an overseas entity for the Haryana GST Registration Number, and a similar payment of Rs.11,30,474/- was made for the Tamil Nadu GST Registration Number, totaling Rs.1,44,19,433/- plus interest of Rs.42,17,774/-. However, a notice was issued for an outstanding demand of Rs.25,28,02,998/-, which the petitioner contests.

The case is scheduled to be heard with CWP-25351-2023 on 13.02.2024. The court has directed the respondents to take a decision on the petitioner’s response by 15.01.2024 and has ordered that no coercive steps to recover the amount shall be taken if any adverse order is passed against the petitioners during the pendency of the writ petition.

This case involves complex legal and tax matters, and the court has given the petitioner time to prepare a comprehensive response. The final decision is pending until the next hearing.

FAQ:

Q1: What is the dispute in the case?

A1: The dispute revolves around the payment of service tax on the amount of salaries and perquisites relating to expatriates under Manpower Recruitment or Supply Agency Service.

Q2: What action has the petitioner taken?

A2: The petitioner voluntarily deposited a sum towards IGST, but a significant outstanding demand was assessed.

Q3: What is the court’s directive in the case?

A3: The court has directed the respondents to take a decision on the petitioner’s response by 15.01.2024 and has ordered that no coercive steps to recover the amount shall be taken if any adverse order is passed against the petitioners during the pendency of the writ petition.