Question: An employee of Foreign Parent company is director of subsidiary and receiving salary from both employers. Also, the tax component of total salary is paid by Indian subsidiary and later on tax deposited by Indian company is recovered proportionate to salary through a debit note from holding company. Is that charge liable for reverse charge?
Answer: Once it is established that the person is an employee no reversibility can be fixed on any amount recovered in context of employment of such person. The debit note raised by the Indian company shall be a mere financial transaction and it cannot be seen as a consideration for rendering any supply.
