TaxTMI 
TaxTMI 
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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.... State, both being distinct persons - Regarding. Ref: Circular No. 199/11/2023-GST, dated 17.07.2023, issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs. In the reference cited, the Central Board of Indirect Taxes & Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi, has issued Circular No 199/11/2023-GST, dated 17.07.2023 on the recommendations of the GST Council. Hence, following pari-materia circular is issued. 2. Various representations have been received by GST Council, seeking clarification on the taxability of activities performed by an office of an organisation in one State to the office of that organisation in another State, ....
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....red to as 'ISD') mechanism for distribution of ITC in respect of common input services procured by them from a third party but attributable to both HO and BOs or exclusively to one or more BOs? It is clarified that in respect of common input services procured by the HO from a third party but attributable to both HO and BOs or exclusively to one or more BOS, HO has an option to distribute ITC in respect of such common input services by following ISD mechanism laid down in Section 20 of TNGST Act read with rule 39 of the Tamil Nadu Goods and Services Tax Rules, 2017 (hereinafter referred to as 'the TNGST Rules'). However, as per the present provisions of the TNGST Act and TNGST Rules, it is not mandatory for the HO to distr....
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....t be including the cost of a particular component such as salary cost of employees involved in providing said services while issuing tax invoice to BOs for the services provided by HO to BOs. Whether the HO is mandatorily required to issue invoice to BOS under section 31 of TNGST Act for such internally generated services, and / or whether the cost of all components including salary cost of HO employees involved in providing the said services has to be included in the computation of value of services provided by HO to BOs when full input tax credit is available to the concerned BOs. The value of supply of services made by a registered person to a distinct person needs to be determined as per rule 28 of TNGST Rules, read with sub- section....