# SC takes up EY’s tax dispute over overseas employee transfers > Supreme Court hears EY’s challenge to Delhi High Court ruling on employee secondment tax payments. - Title: SC takes up EY’s tax dispute over overseas employee transfers - Summary: Supreme Court hears EY’s challenge to Delhi High Court ruling on employee secondment tax payments. Supreme Court will review EY’s tax dispute over whether… - Keywords: supreme court, tax dispute, employee secondment, india us tax treaty, delhi high court, income tax department, tax payments, technical services, salary reimbursements, news, india, takes - Source: mint — https://livemint.com/companies/news/ey-supreme-court-employee-secondment-tax-dispute-11792999424921.html - Author: Krishna Yadav - Published: 2026-10-26T08:55:13+00:00 - Read time: 1 min - Topics: supreme court, ey, tax dispute, employee secondment, india us tax treaty, delhi high court, income tax department, tax payments, technical services, salary reimbursements, news, india ## Supreme Court agrees to hear EY’s tax challenge Supreme Court agreed to hear EY’s plea challenging Delhi High Court ruling that treated payments made by Indian entities to US arm for employees deputed to India as fees for technical services rather than salary… > EY US maintained that the payments covered employee-related costs and did not constitute fees for technical services under the India-US tax treaty ## High court ruling on secondment payments Delhi High Court ruled EY US retained significant links with employees who remain on its rolls while working in India and payments qualified as fees for technical services. > The court found that EY US retained significant links with the employees, who remain on its rolls while working in India ## Tax dispute timeline Dispute covers assessment years 2018-19 to 2022-23 with payments added to EY US’s taxable income for 2019-20 by ₹ 50.99 crore. > For assessment year 2019-20, the assessing officer passed an order on 27 July 2022, adding about ₹ 50.99 crore to EY US’s taxable income ## EY’s legal position EY US argued payments covered only employee-related costs and did not constitute income earned from providing technical services. > EY US argued that the payments covered only employee-related costs and did not constitute fees for technical services under the India-US tax treaty ## ITAT ruling Income Tax Appellate Tribunal ruled in favor of EY on secondment issue, holding payments were cost-to-cost reimbursements and did not qualify as fees for technical services. > In an order dated 20 June 2023, the Income Tax Appellate Tribunal (ITAT) ruled in its favour on the secondment issue ## Supreme Court next hearing Supreme Court will hear the case next on 1 December after issuing notice to income tax department. > The matter will next be heard on 1 December ## Impact on multinationals Consulting and technology firms operating global capability centres in India will closely watch Supreme Court ruling for tax implications on employee secondment arrangements. > Consulting and technology firms, as well as companies operating global capability centres in India, will closely watch the case ## Key takeaway Supreme Court will review EY’s tax dispute over whether payments for Indian employees seconded from US to India count as technical services fees or salary reimbursements.