mumbai foreign nationals working in india will be exempt from fringe benefit tax fbt on the cost of transportation from their residence to the workplace according to a supreme court ruling responding to a petition filed by an australian firm rd falcon a pty the apex court overruled an earlier decision by the authority for advance ruling aar a quasi judicial body for resolving tax disputes involving foreigners the australian company which is in the business of mobile offshore drilling rig modr had to transport employees from their residence abroad to their workplace the offshore drilling site in india the question that had cropped up was whether the transportation cost from their residence outside india was liable for fbt under the existing fbt provisions the conveyance paid to the employees from their place of residence to the work place is exempt from taxation the court dealt with the question as to whether the same is applicable in the case of employees outside indiathe apex court ruled that residence mentioned under section 115wb3 of the income tax act which provides for exemption from fbt for transportation of employees from residence to workplace should not be restricted to india it should apply to transportation of employees outside india too sudhir kapadia executive director tax and regulatory services kpmg said with this judgement all such expenses become exempt from fbt earlier the australian company had approached aar for a decision on this issue when the latter held that such expenses were taxable the company moved the supreme court fbt was introduced in the finance bill 2005