एर्न्स्ट एंड यंग ने दिल्ली उच्च न्यायालय के निर्णय पर सुप्रीम कोर्ट में चुनौती दी: यूएस कर्मचारी को भारत भेजने पर कर की नई व्याख्या

Tax On Employee Seconded From Us To India: Ernst & Young Challenges Delhi High Court Ruling In Supreme Court

Rajnandini Dutta

30 Sept 2026 11:06 AM IST

Ernst & Young US LLP has approached the Supreme Court challenging a Delhi High Court ruling which held that payments received in connection with employees sent from the US to work with Indian entities were taxable as Fees for Technical Services (FTS).

The dispute concerns whether the amounts received by the US entity were merely reimbursement of salaries and other employment costs or consideration for technical services taxable in India under the India-US Double Taxation Avoidance Agreement (DTAA).

The Delhi High Court had ruled in favour of the Income Tax Department, observing that the seconded employees were involved in training Indian personnel, implementing group policies and processes, and maintaining quality standards. The Court found that these activities involved transfer of technical knowledge and skills and therefore satisfied the “make available” test under the tax treaty.

The Court observed, “The services rendered by the assessee herein includes technical services which would satisfy the 'make available' test, for the reason that there is a transfer of skill/knowledge.”

The Income Tax Appellate Tribunal (ITAT) had earlier accepted the assessee's case that the payments were only cost-to-cost reimbursements. It had also held that the seconded personnel became employees of the Indian entities during their assignment in India.

The High Court, however, disagreed with the Tribunal. It noted that the personnel were sent to India for a limited period and returned to their overseas employer after completing their assignments. It also considered the nature of the functions performed by them while working with the Indian entities.

On this basis, the High Court set aside the ITAT's findings on the secondment issue and decided the question in favour of the Revenue.

The assessee has now carried the ruling to the Supreme Court. The dispute relates to five assessment years from 2018-19 to 2022-23.

The High Court had separately remanded another issue concerning payments for professional services rendered from the US to Indian clients to the ITAT for fresh consideration.

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