Did the Supreme Court decide that all secondments attract GST?

No, and the judgment says so. It held that the particular arrangement before it amounted to a taxable supply of manpower, on facts that included the overseas entity retaining control and the recovery carrying more than bare cost. The Court framed the decision as turning on those facts and cautioned against treating it as a universal rule. Reading it as a blanket proposition is the single most common error in this area, and the department has been instructed against it too.

What has CBIC said about applying it?

Instruction 05/2023 tells officers that secondment arrangements differ, that tax implications depend on the specific nature of the contract and its terms, and that the decision should not be applied mechanically to every case. Each matter requires examination of its own factual matrix. That instruction binds the department, and a notice that simply cites the judgment without engaging with your facts is not applying it correctly.

What facts actually decide it?

Three, broadly. Who is the real employer — where the employment contract sits, who pays, who can dismiss. Who exercises control and supervision day to day. And what is being recovered — a bare reimbursement of salary already taxed as employment income looks materially different from a recovery carrying a markup or bundling other services. Documentation that answers those three consistently is worth more than any argument constructed afterwards.

Has anything changed since the Supreme Court decision?

The direction of travel in the High Courts has been towards examining facts rather than applying the judgment as a rule, and there have been decisions holding secondment not taxable where the facts differed, as well as matters remanded for fresh adjudication on exactly that basis. The position is not settled and should not be presented as though it were, in either direction.

We have already received a demand. What is the starting point?

Reading the notice for what it actually engages with. A demand that recites the judgment and assumes it applies is a different problem from one that has examined your employment contracts and your recovery mechanism and reached a reasoned conclusion. The first can be met on the instruction and on your facts; the second needs the facts themselves to be addressed. Both are answerable, but not in the same way.

Secondment and Expat GST: A Fact Question, Not a Rule

Short answer: the Supreme Court held one secondment arrangement to be a taxable supply of manpower, on its own facts, and said so. CBIC has instructed that it not be applied mechanically. Later High Court decisions have gone the other way where facts differed. This is a fact question, and yours have not been decided.

Why the argument exists at all

A group sends senior people from the parent to work in the Indian entity. Their salary continues to be paid abroad for practical reasons — social security, banking, continuity of benefits — and the Indian entity reimburses it.

Two readings of the same arrangement:

Employment. The individuals work for the Indian entity, under its direction, as its employees. Services by an employee to an employer are outside GST, and the reimbursement is just how payroll happens to be routed.
A supply of manpower. The overseas entity supplies staff to the Indian entity for consideration. That is a taxable service, on which the Indian entity pays under reverse charge.

Both are coherent descriptions of arrangements that look similar on the surface. Which one your arrangement is depends on facts that are usually recorded across several documents drafted by people who were not thinking about GST.

What the decision actually held

The Supreme Court found a taxable supply of manpower on the arrangement before it. The features that mattered included the overseas entity retaining control over the seconded personnel and the recovery going beyond a bare pass-through.

Two things about the judgment are routinely dropped when it is cited:

It was expressly decided on its facts, with a caution against treating it as a general rule.
It therefore establishes how to analyse a secondment, not what the answer is for every secondment.

What CBIC told its own officers

Instruction 05/2023 is the document to have to hand, because it binds the department:

secondment arrangements differ, and the tax implications differ with them;
the treatment depends on the specific nature of the contract and its terms and conditions; and
the decision is not to be applied mechanically — each case requires examination of its own factual matrix.

A demand that recites the judgment without engaging with your facts is not applying the instruction. That is a procedural point as much as a substantive one, and it is available before any argument about the facts themselves.

Where it has gone since

The High Courts have moved towards examining facts rather than applying the decision as a rule. There have been rulings holding secondment not taxable where the facts differed from those before the Supreme Court, and matters remanded for fresh adjudication precisely because a mechanical application was not adequate.

The honest position: not settled, moving in the direction of factual analysis, and not to be presented as decided in either direction. Anyone telling a GCC that secondment is simply taxable, or simply not, is overstating it.

The three facts that decide it

	Question	What evidences it
Employer	Who actually employs the individual?	Where the employment contract sits, who pays, who can terminate
Control	Who directs and supervises day to day?	Reporting lines, appraisal, work allocation in practice
Recovery	What is actually being recharged?	Whether it is bare salary already taxed as employment income, or carries a markup or bundles other services

The third is where arrangements most often become vulnerable, because a recovery that quietly includes an administrative charge, or bundles support the parent also provides, stops looking like reimbursement and starts looking like consideration for a service.

Consistency across the three matters more than the answer to any one. An arrangement where the Indian entity is the employer, exercises control, and reimburses bare cost is coherent. One where the paperwork says employment but the recovery carries a markup and the appraisals run to the parent is not, and the incoherence is what gets examined.

What to do

Read the secondment agreement and the employment contracts together, and see whether they describe the same arrangement.
Establish who exercises control in practice, not on paper.
Break down exactly what is recovered and confirm it is bare cost.
Check the income tax treatment is consistent — salary offered to tax in India as employment income supports the employment reading.
Where a demand exists, separate whether it engaged with your facts from whether it reached the right conclusion on them.

Points 1 to 4 are worth doing before a notice arrives, because the documents either already say the same thing or they do not, and that is not fixable afterwards.

For the other questions a captive faces on the same facts, see GCC and captive unit taxation — control over expatriates bears on the parent's permanent establishment exposure as well, and the two should not be answered inconsistently.

A secondment arrangement is itself an intercompany transaction, and it lands in the annual transfer pricing report along with everything else — see Form 3CEB is now Form 48.

This is a working reference, not the statute, and this area is unsettled. For anything you are relying on, confirm the current position directly.

Seconded expatriates and GST: a fact question, not a rule