9911796707
TMI BlogClarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct personsX X X X Extracts X X X X X X X X Extracts X X X X ..... State, both being distinct persons Reg. Ref : Circular No.199/11/2023-GST, dated 17.07.2023 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs. ***** Various representations have been received seeking clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under section 25 of Andhra Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the APGST Act ). The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arified that in respect of common input services procured by the HO from a third party but attributable to both HO and BOs or exclusively to one or more BOs, HO has an option to distribute ITC in respect of such common input services by following ISD mechanism laid down in Section 20 of APGST Act read with rule 39 of the Andhra Pradesh Goods and Services Tax Rules, 2017 (hereinafter referred to as the APGST Rules ). However, as per the present provisions of the APGST Act and APGST Rules, it is not mandatory for the HO to distribute such input tax credit by ISD mechanism. HO can also issue tax invoices under section 31 of APGST Act to the concerned BOs in respect of common input services procured from a third party by HO but attributable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by HO to BOs. Whether the HO is mandatorily required to issue invoice to BOs under section 31 of APGST Act for such internally generated services, and/ or whether the cost of all components including salary cost of HO employees involved in providing the said services has to be included in the computation of value of services provided by HO to BOs when full input tax credit is available to the concerned BOs . The value of supply of services made by a registered person to a distinct person needs to be determined as per rule 28 of APGST Rules, read with sub-section (4) of section 15 of APGST Act. As per clause (a) of rule 28, the value of supply of goods or services or both between distinct persons shall be the open market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees of the HO involved in providing said services to the BOs, is mandatorily required to be included while computing the taxable value of the said supply of services provided by HO to BOs. In respect of internally generated services provided by the HO to BOs, the cost of salary of employees of the HO, involved in providing the said services to the BOs, is not mandatorily required to be included while computing the taxable value of the supply of such services, even in cases where full input tax credit is not available to the concerned BO. 4. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 5. Difficulty if any, in the implementation of this circula ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
