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Employee services from branch office to head office, and vice versa to attract 18% GST: AAR
Services provided by employees of a company’s branch office to its head office and vice versa located in different states would be liable to 18 per cent GST, the AAR has said.
Profisolutions Pvt Ltd, which has its registered office in Karnataka and a branch office in Chennai, had approach the Authority for Advance Ruling (AAR) seeking a ruling on whether the services provided to head office will attract GST.
The branch office of the applicant is providing support services like engineering, design and accounting to its head office at Bangalore in Karnataka.
The applicant contends that employees are appointed and working for the company as a whole and not employed for head office or branch office specifically.
Under Goods and Services Tax (GST), businesses need to obtain registration in every state in which they have a physical presence.
The AAR observed that under GST law supply of services between two registrations of the same person in same state or in different states attract tax.
“Services, including services of common employees of a person, provided by branch office to head office and vice versa, each having separate GST registration, will attract GST liability,” the AAR said.
This topic was modified 11 months ago by jmitra
Posted : 23/04/2023 12:00 am
