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G. S. SANDHAWALIA, LAPITA BANERJI
BMW India Pvt. Ltd. – Appellant
Versus
UOI – Respondent
JUDGMENT
Counsel inter alia, while referring to the facts of CWP-27034- 2023, contends that the petitioner's parent company is BMW AG based in Munich, Germany and an agreement dated 01.04.2006 (Annexure P-2) was entered into for employing personnel having requisite skills and expertise. Part of their remuneration (salary, bonus benefits, reimbursement etc.) were to be paid outside India to the extent permissible under the laws and regulations of India. The said amounts were to go through the parent company for administrative convenience and the said company was to act as a paying office. The balance amount was to be paid by way of employment agreements to be entered into with each identified Expatriate and the petitioner was to bear all personnel costs and expenses. Reference is made to one such agreement dated 20.11.2015 (Annexure P-3) whereby a Whole-time Director was employed for a period of 3 years to show that the said Director was getting a package as such which was salary payable subject to deduction of income tax and statutory levies.
2. It is contended that on an earlier occasion also, dispute as such had arisen and the Tribunal vide order dated 17.10.2017 (Annexure P-16) h
The court ruled that no coercive recovery steps should be taken against the petitioners during the pendency of the writ petition, emphasizing jurisdictional issues related to taxability.
The existence of a statutory remedy does not preclude the exercise of writ jurisdiction, especially when constitutional remedies are invoked.
The main legal point established is that the liability to pay GST under the Reverse Charge Mechanism rests with the recipient of the service, and the contract terms do not shift this liability.
The court ruled that GST does not apply to services executed outside India's territory, affirming that the taxpayer's activities in Maldives constituted a fixed establishment subject to local laws.
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