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TMI Blog2021 (5) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... er of services i.e. the location of the applicant which is located in the State of Maharashtra, India. Non-profit organization - HELD THAT:- From the website of Dubai Chamber, UAE, it is seen that they are providing various services for which fees are charged. Thus it is clear that the applicant s Head Office appears to be a profit making organization, in which case the applicant cannot be considered as a non-profit making organization. Supply or not - HELD THAT:- There is definitely, a supply of services by the applicant to various businesses in India and Dubai and such supply is done by the applicant as an intermediary - activities under taken by the DCCI is nothing but Business . The terms Supply and Business are defined under GST Act, in an inclusive manner and have wide connotations. Hence the reply filed by the applicant to cross objection is incorrect. Activities undertaken by the applicant are covered by the scope of word Commerce , Business and also covered under the scope of Supply . The applicant connects businesses in India with business partners in Dubai. In other words applicant is providing services, to various business in India and Dubai. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms, Applicant shall undertake below liaison/ representation activities in India; 1- Liaison between India office and Dubai office 2- Attending and representing DCCI in various seminars, conferences trade fairs 3- Connecting businesses in India with business partners in UAE and vice versa 4- Organizing events interactions with Indian stakeholders for sharing information about Dubai Apart from above, no other activity is to be performed by applicant in India whether with or without any consideration. 2.3 All expenses incurred by applicant (predominantly office rent, salaries, consultancy services), are to be reimbursed from DCCI UAE on cost-to-cost basis. Thus, no consideration is to be charged/ paid for aforementioned activities. 2.4 Thus, applicant is not a separate legal entity, rather it is a mere extension of DCCI UAE. Reimbursement of expenses received from DCCI UAE cannot be treated as consideration under GST law and hence, Applicant is not liable to obtain GST registration. 2.5 As per Regulation 2 (e) of the Foreign Exchange Management Regulations. 2016 ( FEMR ) for establishment of Liaison Office ( LO ) in India, a LO Acts as a communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CI LO. Therefore, applicant is not liable to obtain registration under GST laws. 2.12 Similar views have been adopted in similar matters by the recent rulings by the Advance Ruling Authorities of Rajasthan and Tamil Nadu, in the case of M/s Habufa Meubelen B.V. - Indian LO and M/s Takko Holding GMBII (Tamilnadu), respectively. 2.13 Hence, activities of applicant are not covered under ambit definition of service or supply under GST; applicant is not liable to obtain registration under GST law and its activities are not liable to levy or payment of GST . 2.14 Additional Submission made on 11.12.2020 2.14.1 With reference to requirement of Documentary evidence to substantiate that, Dubai Chambers of Commerce and Industry is a non-profit organization, reference is made to Law No 8 of the Year 1997 on the Organization of the Dubai Chamber of Commerce and Industry passed by the Ruler of the Emirate of Dubai wherein it is mentioned that The Chamber is a non-profit public utility organization, with legal entity and financial and administrative independence. Hence, it can be seen that the organization has been set up with no-profit objective, to look after the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, and also the provisions of Rule 2 (31) of the CGST Rules are applicable to Applicant s activity and the same is to be treated as consideration. The consideration received by the applicant is taxable under Section 2(31) of the CGST Act 2017. Any amount received in the course of furtherance of business is treated as consideration. 3.5 Applicant is receiving consideration and as per Section 7 of CGST Act applicant s activities are to be treated as supply and hence taxable under CGST Act. Therefore applicant must get itself registered. 3.6 Applicant has submitted that under the ambit of RBI norms, applicant shall undertake only liaison/representation activities as mentioned in their application. Hence, applicant has sought clarification as to whether their activities shall be treated as supply. 3.7 It is seen that as per Section 7 (1) (c) supply includes the activities specified in Schedule I, made or agreed to be made without a consideration;------ . Also Section 2 (105) makes it abundantly clear that supplier shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied. Hence the claim of the applicant that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,270/-. It appears that for the period 01.01.2019 to 31.08.2019, the applicant has received ₹ 1,09,73,532 /- which is far exceeding the expenditure amount of ₹ 82,81,609 / for the same period. 3.10 From the facts stated above, it is clear that, the applicant is not functioning on a cost to cost basis and is receiving surplus amount, as remittances, from their Head Office. This surplus amount is nothing but profit. Hence remittances received by the applicant should be treated as consideration under GST Act. Hence, applicant should obtain GST registration and pay GST on the said amount of consideration received by it. 3.11 In the Sr. No. 11 of the Notes to Financial Statement for the financial year 2018 2019 it is observed that the Statutory Auditor of the applicant has made a remark that The Head Office has made the payments of ₹ 27, 24,700 /- (₹ 3,79,800 /- towards security deposit for the office premises and ₹ 23,44,900/- towards expenses) to the vendors directly in the current financial year. The liaison Office has not applied for ratification of these payments with the Reserve Bank of India till the date of the signing the financial stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for final e-hearing on 26.11.2020. Authorized Representative of the applicant, Shri. Rushabh Gandhi CA., and Shri Lucky Ahuja CA., both were present. Jursdictional officer Shri lyer K.S. Suryanarayan, Suprintendent, Range-I, Mumbai was also present. The authorized Representatives agreed to establish, with documents that they are a non-profit organization. They have also made submissions in support of their contention that they are just a Liason office of Dubai Chamber of Commerce, their Head Office in Dubai. They have also submitted that they cannot be considered as Intermediary . 4.5 Heard both, the applicant as well as the jurisdictional officer. 05. DISCUSSIONS AND FINDINGS 5.1 We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional officer. 5.2 Applicant, has mentioned that it shall undertake liaison/ representation activities in India viz. (1) Liaison between India office and Dubai office ; (2) Attending and representing DCCI in various seminars, conferences trade fairs ; (3) Connecting businesses in India with business partners in UAE and vice versa ; (4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned that it is arranging or facilitating supply of goods or services or both but has definitely said that it connects businesses in India with business partners in Dubai. The term business, in a general sense, means an activity which generates income, where there may be trading of goods or provision of services, etc. The applicant has not given details of their business partners in Dubai but we have no hesitation in concluding that these business partners would be companies doing business of some kind involving trading in goods or provision of services or securities or all of them. Similarly is the situation with businesses in India . These businesses also would be involving trading in goods or provision of services or securities or all of them. By connecting businesses in India with business partners in Dubai, applicant is actually arranging or facilitating the supply of goods or services or both, or securities, between two or more persons and therefore satisfies condition number (ii) mentioned above. 5.6.3 Further, it is very clear from the applicant s submissions that it is not providing any services on its own account. Rather it is providing the service of connecting tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is AED 800 while the same Carnet is issued to a non-member for AED 1800. Further, there are charges for Carnet to be issued for more than additional countries, there are regularization fees, cancellation fees, etc. all collected by the Dubai Chamber of Commerce, UAE. The website mentions that a collection of Security Deposit which may differ according to value of goods and number of countries intended to visit. The website also mentions that the Dubai Chamber of Commerce, UAE has launched the Global Trusted e-Network , a global platform comprising trusted businesses, helping members establish trust with their potential customers and business partners. To ensure that only reliable businesses are listed, each company goes through credit rating verification process and receives a credit rating score issued by Dubai Chamber in collaboration with international credit rating agencies. In addition, a complementary Credit Rating Business Information Report will be issued. Upon verification, a company will receive Trusted Business digital Certificate and Stamp (T C apply) that can be displayed on their website and other corporate collateral. Dubai Chamber, UAE also offers the Credit Ratin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anization and is effecting supply of services for a consideration for which, it has to obtain GST registration and pay applicable GST on its transactions. 5.9 Finally, we observe that, in the Applicant s letter dated 21/06/2020, there is Annexure-A attached to it and on page No. 3 of said Annexure, applicant has given the meaning of commerce as under. The buying and selling of goods and services, especially in large amount. 5.10 This interpretation is not correct. The meaning of Commerce is anything which aids the trade is covered by the Scope of Commerce . There is no doubt and it is admitted fact that the applicant DCCI is covered by the Scope of the word Commerce . Certain dictionary meanings of the word Commerce are mentioned as under:- Oxford Dictionary: defines Commerce as Trade, especially between countries; the buying and selling of Goods and Services . Merriam-Webster Dictionary: defines Commerce as The exchange or buying and selling of commodities on a large scale involving transportation from place to place. Dictionary.Com: defines Commerce as An interchange of goods or commodities, especially on a large scale between d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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