TaxTMI 
TaxTMI 
2021 (1) TMI 690
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....d sale of agricultural machinery and agricultural machinery spare parts. 1.2 WFSE India is established as a Liaison office in India, currently operating from its Gurugram Office located at 7002A, Palm Springs Plaza, Golf Course Road, Sec 54, Gurugram, Haryana, 122003, with the permission of RBI, vide letter no. FE.CO.FID/10.97.319/2009-10 dated 25th August 2009 to undertake following activities:- (a) Representing in India the parent company/group companies (b) Promoting export import from/to India (c) Promoting technical/financial collaborations between parent/group companies and companies in India (d) Acting as communication channel between the parent company and Indian companies 1.3 Activities car....
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....ion/fees has been charged or any other remuneration received/income earned by the office in India for the liaison activities/services rendered by it or otherwise in India. 2. Question(s) on which advance ruling is required 2.1. Whether the reimbursement of expenses and salary paid by Wilhelm Fricke SE, Germany to the liaison office established in India is considered as supply of services as per Section (7) of the CGST Act, 2017 or under Schedule I of CGST Act, 2017, especially when no consideration is charged/ paid. 2.2 Weather the applicant i.e. the Liaison Office is required to get registered under GST? 2.3 Whether the applicant i.e. LO is required to pay CGST/SGST/IGST, as the case may be, on reimbursement received from HO? ....
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....ng, etc., therefore the same is not a supply of service under GST law in absence of charging of consideration. 3.4 Further, Schedule I of CGST Act, 2017 specifies that supply of services between related parties or distinct persons as per Section 25, even without consideration, constitute a supply, when made in the course or furtherance of business. Related Person and Distinct Person has been defined under CGST Act, 2017 as follows:- Related person is defined through Explanation to Section 15 of CGST, which is as follows: (a) Persons shall be deemed to be "related persons" if- (i) such persons are officers or directors of one another's businesses; (ii) such persons are legally recognised partners in bus....
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.... just an extension to its German office in its procurement activities from suppliers in India as mentioned in the RBI permission letter, Therefore, they are not distinct entity, as it is not a separate legal entity which is established. 3.6 There is no separate legal entity that has been established and WFSE India i.e. LO has not taken any activity of trading, commercial or industrial nature nor would they enter into any business contracts in its own name without RBI's prior permission. LO is not receiving any fees for the services provided to the HO as the same are being provided by the employees of the same entity. The Head office, reimburses the expenses incurred by WFSE India in the nature of salary, rent, security, travelling etc. F....
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....ermany reimburses the expenses incurred by the applicant for their operations in India which are in the nature of salary, rent, security, electricity, travelling etc. The applicant does not have any other source of income and it is solely dependent on the HO for all the expenses incurred by the applicant, which are subsequently reimbursed by the HO. Therefore the HO and Liaison Office cannot be treated as separate persons. Since, HO and Liaison Office cannot be treated as separate persons, there cannot be any flow of services between them as one cannot provide service to self and therefore, the reimbursement of expenses made by the HO cannot be treated as a consideration towards any service. 4.3 The amount received from HO are the funds ....