Liaison Office Services from Head Office Outside India not Subject to GST

The judgment determined that the activities conducted by the Applicant's Head Office located outside India and provided to the Applicant, a Liaison Office, do not constitute a supply under the CGST Act, 2017. As the Applicant is not engaged in any business activities, the services received are not subject to GST. Consequently, the Applicant is not obligated to register under Section 24 of the CGST Act for the services received from the Head Office.

---

---

Issues Involved:
1. Whether the activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant will amount to supply under Section 7 of the CGST Act, 2017, considering that the Applicant is not engaged in any business.
2. Whether the activities carried out by the Applicant's 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.
3. Whether the Applicant would be required to obtain registration in India under Section 24 of the CGST Act, 2017, with respect to activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant, considering that the Applicant is not engaged in any business.

Detailed Analysis:

Issue 1: Whether the activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant will amount to supply under Section 7 of the CGST Act, 2017, considering that the Applicant is not engaged in any business.

The judgment begins with the definition of "supply" under Section 7 of the CGST Act, which includes all forms of supply of goods or services for a consideration in the course or furtherance of business. The Applicant, a Liaison Office (LO) of the World Economic Forum (WEF) in India, is restricted by the Reserve Bank of India (RBI) from engaging in any commercial, trading, or industrial activities. The LO's activities are confined to acting as a communication channel between the Head Office (HO) and Indian entities, without any business or commercial activities.

The judgment emphasizes that the LO does not engage in any business as defined under Section 2(17) of the CGST Act, which includes trade, commerce, manufacture, profession, vocation, adventure, wager, or any other similar activity. The LO's activities are purely liaison in nature, and it does not generate any income or engage in any business contracts in its name.

Given that the LO is not engaged in any business activities, the services received from the HO do not fall under the definition of "supply" as envisaged under Section 7 of the CGST Act. Therefore, the activities carried out by the HO and rendered to the Applicant do not amount to supply under the CGST Act, 2017.

Issue 2: Whether the activities carried out by the Applicant's 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.

Since the activities carried out by the HO and rendered to the Applicant do not amount to supply under Section 7 of the CGST Act, they are not liable to GST. The judgment reiterates that the LO is not engaged in any business activities and merely acts as a communication link between the HO and Indian entities.

The services received by the LO from the HO are considered import of services. However, as per Section 7(1)(b) of the CGST Act, import of services for a consideration in the course or furtherance of business is deemed to be a supply. Since the LO is not engaged in any business, the import of services from the HO is not in the course or furtherance of business. Therefore, the activities carried out by the HO and rendered to the Applicant are not liable to GST in the hands of the Applicant.

Issue 3: Whether the Applicant would be required to obtain registration in India under Section 24 of the CGST Act, 2017, with respect to activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant, considering that the Applicant is not engaged in any business.

As the activities carried out by the HO and rendered to the Applicant do not amount to supply and are not liable to GST, the Applicant is not required to obtain registration under Section 24 of the CGST Act, 2017. The judgment concludes that the LO is not engaged in any business activities, and the services received from the HO are not in the course or furtherance of business. Therefore, the Applicant is not required to obtain GST registration in India for the activities carried out by the HO and rendered to the Applicant.

Conclusion:

1. The activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant do not amount to supply under Section 7 of the CGST Act, 2017.
2. The activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant are not liable to GST in the hands of the Applicant.
3. The Applicant is not required to obtain registration in India under Section 24 of the CGST Act, 2017, with respect to activities carried out by the Applicant's Head Office located outside India and rendered to the Applicant.

---