TaxTMI 
TaxTMI 
2019 (11) TMI 1596
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....cts of M/s. NTPC Limited, M/s. Meja Urja Nigam Private Limited and M/s. Damodar Valley Corporation being Mega power projects, located in Solapur (Maharashtra), Meja (Uttar Pradesh) and Raghunathpur (West Bengal) respectively. 3). M/s. Hitachi Power Europe GmbH has constituted 3 Project Offices for undertaking onshore portion of the Project in India, vide Foreign Company Registration Number F04681. As per the applicant, under the Foreign Exchange Management Act, 1999, a Foreign Company executing projects in India is permitted to open an office in India to undertake such projects, commonly referred to as "Project Office". 4) The key roles and responsibilities of project office are described as under: i. The Project Office is set up for a specific project and hence cannot engage itself in any other activity/ business other than the business in relation to the Project. ii. The project should be funded directly or indirectly from abroad by the Foreign Company to the Project Office. iii. The funds arising out of the Project can be remitted to the Foreign Company subject to the condition that the remittance of funds to Foreign Company should not affect the completion of projects i....
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....t Number (PAN') and Tax Deduction and Collection Account Number ('TAN') for a Project Office is issued in the name of the Foreign Company by the Income Tax Department. HPE Germany has obtained the Income tax PAN for the Project Office in India and holds PAN: AACCH4870N. 7). As per applicant, the transaction under reference would not fall under the meaning of the term 'supply' for the following reasons:- a No intention to provide or receive services and hence do not fall under the scope of the term 'Supply'; b The said transaction is covered under the scope of activities or transactions specified in Schedule Ill "services by an employee to the employer in the course of or in relation to his employment" and is hence outside the ambit of GST; and c The transaction will not qualify as 'import of services'. 8). Accordingly, the following question has been posted by the applicant, in its application dated 31.07.2019 (received by the Authority on 14.08.2019), before the Authority: i. Whether the Goods and Services Tax is applicable on the accounting entry made for the purpose of Indian accounting requirements in the books of accounts of Project Office for salary cost of Expat em....
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....ived in this office vide letter C. No. V (30) Tech. /Alld-I/Adv. Rul./HPEG/30/2019/929 dated 30.09.2019, wherein it has been reported that remittance of salary by M/s. Hitachi Power Europe GmbH to its expat employees working in Indian Project located at Meja Thermal Power Project, Tehsi1-Meja, Allahabad shall not be leviable to GST due to the reason that the service by an employee to his employer in the course of or in relation to his employment shall be treated neither a supply of goods nor a supply of service. DISCUSSION AND FINDING 13). At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the 'CGST Act'. 14). We have gone through the submissions made by the applicant and have examined the explanation submitted by them. At the ou....
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....k may permit intermittent remittances by project office pending winding up/ completion of the project subject to submission of the following: i. certified copy of the final audited project accounts; ii. the statutory auditor's certificate showing the manner of arriving at the remittable surplus and confirming that sufficient provisions have been made to meet the liabilities in India including Income Tax, etc; and iii. An undertaking from the project office that the remittance will not, in any way, affect the completion of the project in India and that any shortfall of funds for meeting any liability in the India will be met by inward remittance from abroad." 16.3) From the documents filed by the applicant, we observe that the PAN and TAN for the Project Office has been issued by the Income Tax department in the name of the Foreign Company i.e., Hitachi Power Europe GmbH. Further, they have obtained registration under the Companies Act, 2013, as a 'Foreign Company' vide Registration Number F04681, by mentioning the name of the Company as 'Hitachi Power Europe GmbH'. 16.4) We also observe that M/s. BGR Boilers Private Limited has entered into an agreement with the foreign com....