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2020 (2) TMI 592 - AAR - GSTSupply or not - contracts for supply of goods and supervisory services - import of services - whether the transaction between M/s. Hitachi Power Europe GmbH and its project office located at Meja Thermal Power Project, Allahabad is a transaction between same company or a transaction between two distinct legal entities? - HELD THAT:- A Project Office is merely an extension of the foreign company in India to undertake the project in India and limited to undertake compliances required under various tax and regulatory requirements in India. Accordingly, the transactions between the foreign company and project office is an intra-company affair. If the said transaction is an intra-company transaction, whether the amount paid to the expat employees falls under the definition of "Supply" under GST laws or will it fall under the Schedule III of the CGST Act, 2017 i.e. "Services by an employee to the employer in the course of or in relation to his employment? - HELD THAT:- The project office and the head office are single business entity and the project office is acting as an extended arm of the Head Office. Further the project office is fulfilling all the obligations as employer with reference to expat employees and "Employee-Employer relation exist between the project office and expat employees" - as the service provided by the expat employees to the project office fall under the category of "Services by an employee to the employer in the course of or in relation to his employment" - Accordingly, no GST is leviable on the salary paid to the expat employees and reflected in the books of account of the project office.
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