2023 (4) TMI 541 - AAR - GST

Supply of service or not - providing service by branch office in one State to head office in another State through employees who are common to the company - liability of GST - HELD THAT - From comprehensive reading of the statutory provisions of relevant Acts any supply of service between two registrations of the same person in the same State or in different States attract the provisions of Section 25 (4) and Section 7 read with Schedule I (2) and Section 15 - Even the services of employees deployed in a registered place of business to another registered premises of the same person will attract the provisions as the employees are treated as related person in terms of explanation to Section 15 and treated as supply by virtue of Schedule I (2) to CGST Act 2017.

Summary

Issues:
The judgment addresses the liability to pay tax on services provided by a branch office to a head office under the Goods and Services Tax Act, 2017.

Issue 1: Advance Ruling Authority's Jurisdiction and Binding Nature of Ruling
The Advance Ruling Authority's order can be appealed before the Tamil Nadu State Appellate Authority for Advance Rulings within 30 days. The ruling is binding on the applicant and the concerned officer unless there are changes in law, facts, or circumstances supporting the original ruling.

Issue 2: Application and Nature of Services Provided
The applicant, a company registered under the Companies Act 2013 in Karnataka with a branch office in Tamil Nadu, sought a ruling on the tax liability for services provided to the head office in Karnataka. The services, including engineering, design, and accounting services, are provided by common employees. The applicant argued that these services do not constitute a supply under the CGST Act.

Issue 3: Interpretation of Statutory Provisions
The Authority considered the provisions of the CGST Act regarding supply of goods or services between related or distinct persons. It was noted that services provided by employees deployed in one registered place of business to another registered premises of the same person are treated as a supply under the Act.

Decision:
The ruling states that services provided by a branch office to a head office, with separate GST registrations, will attract GST liability under the IGST Act, CGST Act, SGST Act, or UTGST Act. The ruling emphasizes that services, including those of common employees, between distinct persons with separate registrations are subject to GST.