Manpower Supply to Foreign Firms for Work in India Will Attract GST: UPAAR Ruling
In a recent ruling, the Uttar Pradesh Authority for Advance Ruling (UPAAR) stated that the supply of manpower for work in India to foreign clients, who have no permanent establishment in the country, will not be treated as an export of services and will therefore be subject to Goods and Services Tax (GST). The ruling came in response to an application filed by Noida-based Pacific Staffing Solutions.
Pacific Staffing Solutions sought clarity on its plan to provide manpower services to foreign clients. The company intended to supply general staffing services, including contingent labour (contractual resources) and FTE placements (permanent resources), for clients who do not have a presence in India. The services would be rendered at various locations in India, including end-client offices or factories, as per the client's requirements.
The company's services include managing the payroll life cycle from joining to exit for contingent labour, charging a fixed markup fee on the monthly payroll/CTC, and a one-time fee for FTE placements. Other services offered include corporate recruitment, manpower management, BPO services, and corporate training.
