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TMI BlogService provided by employee to Multy State registered OrganisationX X X X Extracts X X X X X X X X Extracts X X X X ..... This is with reference to Section 7 read with Schedule I and Schedule III . Also Refer AAR ruling and AAAR ruling in the case of M/s. COLUMBIA ASIA HOSPITALS PVT. LTD. = 2018 (8) TMI 876 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA The Issue discussed is as follows: Supply of Services or not? - distinct persons - activities performed by the employees at the Corporate Office in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of or in relation to employment, such as accounting, other administrative and IT System Maintenance for the units located in the other states - supply as per Entry 2 of Schedule I of the CGST Act or not supply of Service as per Entry 1 of Schedule III of the CGST Act ? - employer-employee relationship. After going through the arguments the AAAR has come to a conclusion that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity falls under schedule I and not Schedule III stating that the employee provides service to the HO and HO in turn provides service to its branch units. It is very surprising to note that the neither the party nor the AAR or AAAR has even mentioned that Section 7 Subsection 2 which refers to items listed in Schedule III over rides Sub-section 1 which refer to items mentioned in Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule I . The wording of Section 7 Subsection clearly state that Notwithstanding any thing mention in subsection 1 the following activities will neither be considered as supply of Goods or Services. Does this not literally mean that if the employee has provided services to the organisation it is exempt and that Schedule I will not apply. Any comments - Reply By DR.MARIAPPAN GOVINDA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAJAN - The Reply = In my view, as per schedule III , - 1 - the services provided by an employee to the employer in the course of his employment is not treated as service. The service offered by the employee to the branch offices attract the tax as per the concept of distinct entity. Here the corporate office and the branch offices are distinct entities. - Reply By KASTURI SETHI - The Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... = It is very surprising to note that the neither the party nor the AAR or AAAR has even mentioned that Section 7 Subsection 2 which refers to items listed in Schedule III over rides Subsection 1 which refer to items mentioned in Schedule I . If the employee has provided services to the organisation it is exempt and that Schedule I will not apply. I agree with the above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are not to follow any case law. Rather we are to follow the GST Acts/Rules. Each case has its own facts and circumstances. There are instances where AAR has given contradictory decisions on the same issue against two different parties. That is why National AAAR has been proposed to be set up. - Reply By Ganeshan Kalyani - The Reply = Thanks for clearing the air Sri Kasturi Sir. - Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mandar Sathe - The Reply = Responding to the comment of DR.MARIAPPAN GOVINDARAJAN. Sir The point i am trying to make is as follows: Section 7(1) (c) of CGST Act read with Schedule I line item no 2 further read with Section 25 is subordinate to Section 7(2) and Schedule III . the wordings of Section 7(2) specifically states that Notwithstanding anything contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sub-section 1 (a) activities or transactions specified in Schedule III ; ............shall be treated neither as a supply of goods nor a supply of services. (Thus the provisions of Subsection 2 overrides the Subsection 1 that includes the reference to Schedule I and its in-turn reference to the definition of Distinctive Person as specified in Section 25.) Further the term empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer is not defined in CGST Act also there is no provision which restricts the employment contract to a specific registered unit (or Distinctive person). The provisions of Schedule I and Section 25 can not override the provisions of Subsection 2 and Schedule III . If you read para 25, 26, 27 and 28 of the Case it becomes very apparent that due weightage has not been given to the openi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng words of section 7(2). There is no explanation given as to why these words will not have any effect or how does the term Distinctive person over ride the provisions of section 7(2). Further there are few principles of interpretation to be considered: Subordinate provision. Specific provision i.e. (exemption under Schedule III ) v/s general provision under Schedule I . Also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Taxation statute is is an established principle that if two legitimate interpretations of the provisions are possible the one which favors the assessee is to be considered. - Service provided by employee to Multy State registered Organisation - Query Started By: - Mandar Sathe Dated:- 10-7-2019 Goods and Services Tax - GST - Got 4 Replies - GST - Discussion Forum - Knowledge Shari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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