2026 (2) TMI 504 - AAAR - GST

Provision of AMC/CMC services through field engineers: operational presence does not create local place of business or require separate GST registration

Repair and maintenance services for AMC/CMC executed in-state by deployed Field Service Engineers do not constitute a 'place of business' under Section ... Place of business - repair and maintenance services provided by the Head Office - fixed establishment - location of supplier of services - agent - GST registration liability from place of supply - temporary storage / trunk stock -Whether the services provided by Head Office (HO) of the Appellant through the FSEs (Field Service Engineers) in Odisha would constitute place of business or not. - HELD THAT:- The definition of Place of Business’ also refers to a place from where the business ordinarily runs or operates; So the location of supplier from where it runs the business is vital while determining ‘Place of Business’ of an entity. From a combined reading of the definition of “location of Services” and Place of Business”, it can be inferred that location of services means the location of such place of business or fixed establishment from where the supply is made. The FSEs provides the post-sale repair and maintenance services to the customers in Odisha as employees of the company. That does not tantamount to providing services on behalf of the Appellant Company. The FSEs provide services of AMC or CMC to the clients as per the agreements entered into by the HO of the Appellant. These FSEs do not enter into any contracts/agreements directly with the customers. Also, the FSEs do not carry out the businesses on their own with the customers. If the HO of the Appellant terminates any agreement or contract with the customers in Odisha, the FSE services are also no longer available to the customers. Therefore, the FSEs which work as the service engineers of the Appellant company cannot be termed as ‘agent’ of the Appellant. So, we find, repair and maintenance services provided by the HO of the Appellant through FSEs in Odisha do not constitute ‘Place of Business’ under Section 2(85) of CGST Act as per the three conditions as prescribed in the definition. So, Fixed Establishment’ is exclusively for the supplier of services and related to the place other than the registered place. The Appellant is a service provider who operates from their HO in Mumbai with all agreements and financial transactions being made from the HO of the Appellant. The services provided by the Appellant are performed through their Field Service Engineers who are employees of the Appellant Company. In the State of Odisha, the presence of the Appellant Company is through their FSEs only. The post-sale service provided by the Appellant Company can also be met with other FSEs located elsewhere in India. Therefore, the permanence of the Appellant in the State of Odissa is not noticed due to the fact that all the transactions are conducted from the HO of the Appellate Company. As per the above provisions of Registration under the GST Act, a person is liable to be registered in the State or Union Territory from where he/she is making the taxable supply. As discussed, we observe that all transactions of the Appellant are made from their Head Office located in Maharashtra. No separate transactions are made from the Appellant Odisha. All invoices are issued from their HO of the Appellant. The services provided by the Appellant Company to the Customers of Odisha are made through their FSEs placed in Odisha. Thus, we observe that the Appellant does not require any separate registration in Odisha under the provisions of Section 22 or 24 of CGST/OGST Act, 2017. Issues: (i) Whether repair and maintenance services provided by the Head Office in Maharashtra through Field Service Engineers (FSEs) for AMC/CMC with customers in Odisha constitute a 'place of business' in Odisha under Section 2(85) of the CGST Act; (ii) Whether temporary storage of spare parts and tool kits at the Appellant's location in Odisha constitute a 'place of business' under Section 2(85) or a 'fixed establishment' under Section 2(50) of the CGST Act; (iii) Whether the Appellant is required to obtain separate GST registration in Odisha solely on account of activities performed in Odisha.Issue (i): Whether repair and maintenance services provided by the Head Office in Maharashtra through FSEs for AMC/CMC with customers in Odisha constitute a 'place of business' in Odisha under Section 2(85) of the CGST Act.Analysis: Section 2(85) is inclusive and identifies (a) a place from where business is ordinarily carried on (including warehouses/godowns), (b) a place where books of account are maintained, or (c) a place where business is carried on through an agent. Section 2(71) defines the location of supplier of services as the place of business or fixed establishment most directly concerned with the supply. The facts show that contracts, invoicing, receipt of consideration and inventory control are effected from the Head Office in Maharashtra; FSEs in Odisha are employees deployed for operational execution and do not enter into contracts, maintain books or act as independent agents. The minimal, incidental post-service holding of spare parts by FSEs is operational and not evidence of a place from which business is ordinarily carried on.Conclusion: No. The repair and maintenance services provided through FSEs do not constitute a 'place of business' in Odisha. This conclusion is in favour of the assessee.Issue (ii): Whether temporary storage of spare parts and tool kits at the Appellant's location in Odisha constitute a 'place of business' under Section 2(85) or a 'fixed establishment' under Section 2(50) of the CGST Act.Analysis: Section 2(50) requires a sufficient degree of permanence and a suitable structure in terms of human and technical resources for supply of services. The retained spare parts are minimal, transient (returned within a short period), incidental to execution of service visits, and there is no separate administrative or inventory control in Odisha. The absence of permanence, independent structure or autonomous inventory management indicates no fixed establishment. Similarly, temporary incidental storage does not satisfy the circumstances envisaged in clause (a) of Section 2(85) as a place from which business is ordinarily carried on.Conclusion: No. The temporary storage of spare parts and tool kits does not constitute a 'place of business' or a 'fixed establishment'. This conclusion is in favour of the assessee.Issue (iii): Whether the Appellant is required to obtain separate GST registration in Odisha solely on account of the activities performed in Odisha.Analysis: Sections 22 and 24 prescribe registration where a person makes taxable supplies from a State or falls within specified categories requiring compulsory registration. Given that supplies, invoicing, consideration and inventory control are effected from the Head Office in Maharashtra and the Odisha presence is limited to operational execution by employees without creating place of business or fixed establishment, supplies are made from Maharashtra. Consequently, the statutory criteria for separate registration in Odisha are not met on the basis of the activities described.Conclusion: No. The Appellant is not required to obtain separate GST registration in Odisha solely due to the described activities. This conclusion is in favour of the assessee.Final Conclusion: The Appellate Authority for Advance Ruling has concluded that the Head Office's provision of AMC/CMC services through deployed employees and incidental temporary retention of spare parts in the State do not create a place of business or fixed establishment in that State and do not trigger a requirement for separate GST registration there; the Appellant's supplies are treated as made from the Head Office location.Ratio Decidendi: Where contracts, invoicing, receipt of consideration and inventory control are effected from the principal place of business and local personnel merely execute those contracts with transient incidental storage of parts, such presence does not constitute a 'place of business' under Section 2(85) or a 'fixed establishment' under Section 2(50) of the Central Goods and Services Tax Act, 2017, and therefore does not mandate separate State registration under Sections 22/24.