The Central government has taken decision to exempt the MNCs from paying service tax for the payments being made to its foreign employees. “There shall be no liability to pay service tax on the salary and allowances payable by the applicant to the employees in terms of the dual employment agreement and such salary will not be eligible to levy the service tax as per the provisions of the Finance Act “, the government stated.

This is a big concession to the foreign companies. Many cases are pending against the MNCs for non-payment of this service tax. One after another major concessions are being made to the MNCs and corporates, while the subsidies to the common people are taken away.