Clarification regarding taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons.

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....activities performed by an office of an organisation in one State to the office of that organisation in another State, which are regarded as distinct persons under section 25 of Assam Goods and Services Tax Act, 2017 (hereinafter referred to as 'the Assam GST Act'). The issues raised in the said representations have been examined and to ensure uniformity in the implementation of the law across the field formations, the Principal Commissioner of State Tax, Assam, in exercise of its powers conferred under section 168 of the Assam GST Act hereby clarifies the issue in succeeding paras. 2. Let us consider a business entity which has Head Office (HO) located in State-I and a branch offices (BOs) located in other States. The HO procures ....

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....ST Rules'). However, as per the present provisions of the ASSAM GST Act and ASSAM GST Rules, it is not mandatory for the HO to distribute such input tax credit by ISD mechanism. HO can also issue tax invoices under section 31 of ASSAM GST Act to the concerned BOs in respect of common input services procured from a third party by HO but attributable to the said BOs and the BOs can then avail ITC on the same subject to the provisions of section 16 and 17 of ASSAM GST Act. In case, the HO distributes or wishes to distribute ITC to BOs in respect of such common input services through the ISD mechanism as per the provisions of section 20 of ASSAM GST Act read with rule 39 of the ASSAM GST Rules, HO is required to get itself registered mandatori....

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....lue of supply of services made by a registered person to a distinct person needs to be determined as per rule 28 of ASSAM GST Rules, read with sub-section (4) of section 15 of ASSAM GST Act. As per clause (a) of rule 28, the value of supply of goods or services or both between distinct persons shall be the open market value of such supply. The second proviso to rule 28 of ASSAM GST Rules provides that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services. Accordingly, in respect of supply of services by HO to BOs, the value of the said supply of services declared in the invoice by HO shall be deemed to be open market value of such ser....