Interim Relief Granted to Japan Firm’s India Unit on GST Tax on Expat Salaries

• Kanematsu India, a subsidiary of Japanese company Kanematsu Corporation, has received interim relief from the Punjab and Haryana High Court.
• The relief prevents authorities from taking coercive measures regarding a show-cause notice issued by GST authorities.
• The notice demanded over Rs 2.6 crore on reimbursement of expat employees’ salaries made by Kanematsu India to the Japanese parent company.
• The court observed that the objections raised by the company were not addressed in the show-cause notice.
• The court instructed the authorities to decide on the jurisdictional objection raised by the company during the adjudication of the notice.
• The relief is significant in the context of a Supreme Court judgment in the Northern Operating System case, which established GST under reverse charge for such payments to group companies.

Source: a2ztaxcorp.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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