Cross-border Secondments And The Quest For The True Employer

Background

Secondment arrangement is the most debated topic from taxation standpoint. For years, Indian courts and tribunals have grappled with the tax implications of cross-border employee secondments, pivoting continuously on whether the reimbursement of salary costs represents a taxable technical service or a mere fiscal pass-through.

A foundational pillar of Revenue's position can be said to have been established by the Delhi High Court in the Centrica India Offshore¹case, where the court determined that the overseas seconding entity was the real employer because seconded employees maintained their employment relationship and social security benefits with it and held that overseas seconding entity was effectively rendering technical services through its personnel satisfying the make available test.