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TMI Blog2021 (1) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... penses incurred by the applicant, which are subsequently reimbursed by the HO. Therefore the HO and Liaison Office cannot be treated as separate persons. Since, HO and Liaison Office cannot be treated as separate persons, there cannot be any flow of services between them as one cannot provide service to self and therefore, the reimbursement of expenses made by the HO cannot be treated as a consideration towards any service. The amount received from HO are the funds for payment of salary, reimbursement of expenses like rent, security, electricity, travelling, etc. No consideration is being charged by the applicant from the HO for such services - Further the liaison office is strictly prohibited to undertake any activity of trading, commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company and Indian companies 1.3 Activities carried out by LO in India are as follows:- (a) Identification of vendors in India; (b) Liaising and co-ordination with vendors; Receipt of Order enquiries from WFSE HO and co-ordination with the supplier in India for their price quote; (c) Collection of price quotes from various suppliers, and informed to WFSE HO; (d) In certain cases, prima facia checking of samples developed by Indian Vendors and dispatching the same to WFSE HO through courier; (e) Communication of confirmation of the order to the supplier delivery terms; (f) Preliminary quality check of product before shipment of goods; and (g) Carrying out any other ancillary activity required to procure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsement received from HO? 3. DISCUSSIONS 3.1 The applicant submitted that the activities undertaken by LO/applicant are strictly in line with the terms and conditions specified by RBI permission/approval letter. 3.2 It is submitted that In order to be a supply liable to GST, an activity has to fall under Section 7 of the Central Goods and Services Tax Act, 2017 which reads as under:- 7. (1) For the purposes of this Act, the expression supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five percent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; Distinct person as specified under sub-section (4) (5) of the Section 25, 4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is strictly prohibited to undertake any activity of trading, commercial or industrial nature or entering into any business contracts in its own name. The applicants are merely an executing arm of the head office and do not have resources to carry on the business activity. From this it can be safely concluded that the LO does not have independent existence of its own. HO and the LO are the same entity and the LO do not have any entity of their own, thus there cannot be a flow of services inter-se the liaison office and head office as it amounts to service to one self. 3.7 Hence, based on the foregoing submissions, WFSE India/Applicant is of the view that activities undertaken by us would not be a supply under CGST /SGST Act and thus is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, reimbursement of expenses like rent, security, electricity, travelling, etc. No consideration is being charged by the applicant from the HO for such services. 4.4 Further the liaison office is strictly prohibited to undertake any activity of trading, commercial or industrial nature or entering into any business contracts in its own name. Also the reimbursement claimed by them from their HO is also falling out of the purview of supply of service. As there are no taxable supplies made by the Liaison office, they are not required to get registered. 5. Advance Ruling under section 98 of the CGST/HGST Act 2017 In the backdrop of above discussions and findings, the advance ruling on the question is pronounced as under:- (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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