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2021 (8) TMI 1020 - AAR - GSTSupply or not - Levy of GST - activities carried by the Applicant's Head office located outside India and rendered to the Applicant - requirement to obtain registration in India under Section 24 of the Central Goods and Service Tax Act, 2017 - HELD THAT:- For the purpose of operating the LO in India, the HO outside India assists in support of human resources, recruit employees in India in order to launch the LO operations in India, IT support to set up necessary infrastructure, advise on any accounting, internal control processes, project coordination, and other management guidance for the C4IR India Management team and the said activities are in relation to setting up and administering of the LO office and the RBI permissible activities that the applicant undertakes viz. liaising in nature and does not involve any business activities. The said activities undertaken by the Head Office located abroad, no consideration is paid by the applicant to the Head Office. Since the liaison office is restricted under the RBI regulations to undertake any activities other than of liaising (i.e. acting as a communication channel between its head office and parties in India), the applicant is also not allowed to undertake any business or commercial activities, without the permission of the RBI. Further, the services received by the applicant from its Head Office is import of service since the Head Office is located abroad - There is no doubt that both, the Head Office and the Liasion Office are related persons and the provision of Schedule I mentioned above should be applicable in the present case because the supply received by the applicant from the Head Office is a supply of services. However it is seen that the said provision will be applicable only when the said services are imported in the course or furtherance of business. The applicant can only perform the activities mentioned at (i) to (iv) above. No other activities of any kind can be performed without the express permission and approval of the RBI - the applicant is not undertaking any 'business' as defined under Section 2(17) of the CGST Act and therefore the activities/services received by the applicant from its HO cannot be said to be in the course or furtherance of its business and hence cannot be considered as a supply under Section 7 of the CGST Act, 2017. The activities carried by the Applicant's Head office located outside India and rendered to the Applicant will not amount to supply as envisaged under Section 7 of the Central Goods and Service Tax Act, 2017. Whether the activities carried by the Applicants Head office located outside India and rendered to the Applicant would be liable to GST in the hands of the applicant considering that the Applicant is not engaged in any business? - HELD THAT:- The activities carried out by the Applicants HO located abroad and rendered to the Applicant will not amount to 'supply' as defined under Section 7 of the CGST Act, 2017, since the Applicant is not engaged in any business. Therefore so long as the services imported by the applicant from its HO are not such transaction. However, if the applicant undertakes any further supply which is liable to GST then, in such a case the import of services from its Head Office will be liable to GST at the hands of the applicant. To the import of service in this case, not being considered as a supply liable to GST, the applicant would not be required to obtain registration in India under Section 24 of the Central Goods and Service Tax Act, 2017 with respect to activities carried out by the Applicant's Head office located outside India and rendered to the Applicant. Issues answered in negative.
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