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TMI Blog2018 (10) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... hat supply of services between related parties or distinct persons as per Section 25, even without consideration, constitute a supply. Takko is acting as an extension of the German Office in its procurement activities from suppliers in India as has been spelt out in the RBI permission letter. Hence, they are neither related nor distinct persons, but are in fact working as employees of the foreign office. Accordingly, none of the liaison activities of Takko is covered under the definition of supply. Hence, Takko would not be a supplier under CGST /SGST Act and hence is not required to obtain registration under Section 22 of CGST /SGST Act or pay CGST, SGST or IGST as applicable. Ruling:- The liaison activities being undertaken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce ruling on the following : (1) Whether liaison office is liable to pay GST? (2) Whether a liaison office is required to be registered under GST Act? (3) Whether the Activities of a liaison office amount to supply of services? 2.1 The facts of the case is that RBI upon certain terms and conditions has permitted Takko to conduct the following activities : (1) Representing in India the parent company/group companies (2) Promoting export import from/to India (3) Promoting technical/financial collaborations between parent/group companies and companies in India (4) Acting as communication channel between the parent company and Indian companies (supplier of goods to parent company at Ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for booking space with the shipping company and send the final documents to German office through the respective supplier after effecting the shipment; (7) Admin Department coordinates for the overall administration of Takko; (8) All the administrative expenses are met by the German office, (i.e. as per RBI instruction in their approval; the entire expenses of the office in India is met exclusively out of the funds received from abroad through normal banking channels). 2.3 They have stated that under GST supply includes all forms of suppiy made for a consideration by a person in course or furtherance of business. For activity of Liaison office, no consideration is being received. The Liaison office is maintained by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, quality checking activities along with documentary support; sample Invoice for ordcr placcd with the manufacturer; RBI Permission letter; Statement of Accounts Income-Tax Returns, Inward Remittance Report and sample invoices for the expenditure, appointment letter and Payment document of any one employee, detailed write -up of activities. 3.2 All documents submitted by the applicant were examined. It is seen that RBI has permitted M/s Takko Holding GmBH, Germany to establish a Liaison Office in Tirupur, Tamil Nadu as they are engaged in trading of clothing textiles and operates clothes shops and markets. The Liaison office has been permitted to undertake only the limited set of activities as listed in para 2.I above. No other ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Indian exporters. The advance ruling is sought on Whether liaison office is liable to pay GST? whether a liaison office is required to be registered under GST Act? Whether the Activities of a liaison office amount to supply of services? 4.1 The advance ruling is sought on 1. Whether liaison office is liable to pay GST? 2. Whether a liaison office is required to be registered under GST Act? 3. Whether the Activities of a liaison office amount to supply of services? The above questions may be answered by first clarifying whether the liaison activities undertaken by the applicant amounts to a supply and then whether it is a taxable supply and whether the applicant should take registration under CGST /SGST Act. 4.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seruices or both such as sale, transfer, barter, exchange, licence, renta| Iease or disposal made or agreed to be made for a consideration bA a person in the course or furtherance of business: ( b) import of seruices for a consideration whether or not in the course or furtherance of business; (c) the actiuities specified in Schedule I, made or agreed to be made ruithout a consideration; and ( d) The actiuities to be treated as supply of goods or supplA of seruices as referred to in Schedule II. From the submissions made by the applicant as discussed in above paras, it is seen that the applicant/liaison office is working as per the terms and conditions stipulated by RBI and the reimbursement of expenses salary of e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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