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to treat expatriate remuneration as an import of manpower supply services subject to IGST. The ruling confirms that services provided by employees to employers fall outside the scope of GST and that expatriates on Indian payrolls cannot be reclassified as non-resident taxable persons where they satisfy residency and employment conditions. The judgment reduces GST exposure for multinationals deploying foreign staff, while underscoring the importance of robust employment documentation and alignment across payroll, income tax, and GST frameworks. Its key implications are explored in India Briefing from Dezan Shira & Associates.
heightened scrutiny, particularly for employees whose salaries fall below updated benchmarks or who are approaching age limits. Employers are advised to review compensation structures early and plan renewals well in advance, as discretionary leeway at the local level has largely disappeared. See Dezan Shira’s China Briefing for detailed guidance. India In India, the Karnataka High Court has clarified that salaries paid to expatriate employees do not attract GST under reverse charge where a genuine employer–employee relationship exists. In Huawei Technologies India Private Limited vs. State of Karnataka, the Court rejected the tax authority’s attempt
China China has begun strictly enforcing salary-based thresholds for Category A and B foreign work permit applications, reversing years of comparatively flexible implementation in major cities. Since February 2026, authorities in Beijing, Shanghai, and other jurisdictions have fully reactivated multiplier checks within the national work permit system, blocking submissions that fail to meet minimum compensation levels. Under the enforced framework, Category A applicants must earn at least six times the local average monthly wage, while Category B applicants must meet a four-times threshold. Renewals now face
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ISSUE 21 GLOBAL PAYROLL MAGAZINE
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