Order dated 15 July 2025 
Parties:  M/s. Alstom Transport India Ltd. V. Commissioner of Commercial Taxes & Ors.

Facts -

•  The petitioner, engaged in railway and metro infrastructure projects, was issued IGST demands of ₹57.94 Cr for salary payments made to expatriates deputed by overseas group entities. The authorities alleged it amounted to manpower supply under reverse charge. 
•  The petitioner challenged the classification, contending that the expats were under its control and supervision and were on its payroll, and thus the transaction was not a taxable supply.

Issue -

• Whether salary payments made to expatriates deputed by overseas entities to the petitioner constitute manpower supply services liable to IGST under reverse charge?

Order -

• The single bench of the Hon’ble high court noted that throughout the period of secondment, these employees were under the exclusive administrative and functional control of the petitioner, were integrated into its organizational framework, and adhered to its internal policies, code of conduct, and disciplinary rules.
•  Their salaries were paid directly by the petitioner and subjected to Indian income tax, including deduction of TDS, and they were extended statutory employment benefits under Indian labour laws. 
• Collectively, these facts establish the existence of a genuine employer-employee relationship between the petitioner and the seconded personnel, falling squarely within the exclusion under Schedule III of the CGST Act and thereby not constituting a taxable supply.
• Accordingly, in light of the statutory exclusion under Schedule III and the clarificatory Circular issued by the CBIC, the Court hold that the secondment arrangement does not give rise to any tax liability, and the impugned demand raised by the Revenue is liable to be set aside.