New Delhi, Oct. 27 -- The Supreme Court on Monday agreed to hear global consulting firm EY's plea challenging a Delhi high court ruling that treated payments made by its Indian entities to its US arm for staff deputed to India as fees for technical services rather than salary reimbursements. A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran issued notice to the income tax department, seeking its response to EY's challenge to the high court's June 18 judgment. The matter will next be heard on December 1. The dispute centres on employee secondment arrangements, under which employees are temporarily transferred from an overseas company to work for its Indian group entity. The key question is whether payments made by the Indian entity to its overseas counterpart merely reimburse employee costs or amount to payments for technical services taxed in India. Consulting and technology firms, as well as companies operating global capability centres in India, will closely watch the case as the Supreme Court's eventual ruling could affect how multinational companies structure such arrangements. Mint's queries emailed to EY and the income tax department remained unanswered. The dispute covers assessment years 2018-19 to 2022-23 and concerns employees deputed by Ernst & Young U.S. LLP (EY US) to its Indian entities. Under an arrangement dating to October 2017, employees remained on EY US's rolls, retained certain employment benefits in the US, and were expected to return after completing their assignments. EY India reimbursed EY US for the costs associated with these employees. The tax department argued the payments were not salary reimbursements but consideration for technical knowledge, skills and expertise provided to the Indian entities. For assessment year 2019-20, the assessing officer passed an order on July 27, 2022, adding about Rs.50.99 crore to EY US's taxable income. Similar disputes arose for other assessment years. EY US argued the payments covered only employee-related costs and did not constitute income earned from providing technical services. In an order dated June 20, 2023, the Income Tax Appellate Tribunal (ITAT) ruled in its favour, holding the payments didn't qualify as fees for technical services under the India-US tax treaty. The tax department challenged ITAT's orders before the Delhi high court. In its June 18, 2026 judgment, the court found EY US retained significant links with the staff, who remain on its rolls while working in India. It ruled in favour of the income tax department on the principal secondment issue, holding that the payments qualified as fees for technical services. EY filed its appeal before the Supreme Court on September 15, 2026....