1. The applicant is a company incorporated in India. It is a fully owned subsidiary of a company incorporated in the United States of America (U.S.A). It entered into an agreement with its U.S. principal on 10.6.2007, to be effective from 1.4.2006, for seconding certain of the employees of the principal to the applicant subject to certain terms and conditions. The applicant is to request its American Principal to provide employees who have the required level of expertise required by it. The U.S. Principal would then second the employees for specified periods. This secondment of the employees by the U.S. Principal was based on the U.S. principal's global mobility policy. The employees of the principal seconded to the applicant shall continue to have their payroll processed by the principal. But, the applicant was to reimburse the principal for those amounts and also pay the principal a service charge at $ 15 per employee per payroll cycle for processing the payroll of the seconded employees. The U.S. principal was to ensure that the employees acted in accordance with the instructions and directions of the applicant, that they would devote their whole time to the applicant and that all the responsibilities and risk for work undertaken by the employees will remain with the applicant during the secondment period. The applicant will have the right at any time to reject the seconded employees. The employee was to act on behalf of the applicant as may be required by it. If during the period, the US Principal wanted to terminate the secondment of any of the employees seconded, it was to do so only in prior consultation with the applicant. The terms and conditions of employment with the applicant as stated in the employment agreement between the applicant and the employee, was to remain in force during the secondment period. They were to maintain strict confidentiality with respect to all information regarding the applicant.

2. During the secondment period, the applicant was to reimburse the US Principal all remuneration payable to the employees and meet all official out of pocket expenses of the employees. It was agreed that the payment by the applicant to the US Principal was to be limited to actual costs incurred. During the period the role of the US Principal was restricted to that of a payroll service provider only. The principal was to endeavour to provide appropriate qualified employees.

3. Pursuant to this, certain employees of the US Principal were seconded to the applicant. Separate contracts were entered into with them. On these pleadings, the applicant approached this Authority seeking advance rulings on certain questions and this Authority allowed the application under section 245R(2) of the Act to give rulings on the following questions:

Secondment Charge