AAR Ruling on GST on reimbursement of expenses and salary to Indian Branch (Liason office) by its Foreign Company

Habufa Meubelen B V 2018-TIOL-97-AAR-GST
GST – the Applicant is the Indian branch of a firm incorporated in the Netherlands. The applicant seeks to know if the re-imbursement & salary paid to the liason office in India would attract GST as supply of service, given that no consideration for services is charged or paid . The applicant also seeks to know if it is required to obtain registration under GST. Besides, if it assumed that the re-imbursement of salary & expenses claimed by the liason office in India is treated as consideration for service, then what would be the place of supply of such service.

Held- If the liason office in India did not render any consultancy or other services directly or indirectly, with or without any consideration and the liason office does not have significant commitment powers, except those which are required for normal functioning of the office on behalf of the head office, then the reimbursement of expenses and salary paid by the company based abroad to the liason office established in India will not attract GST – Thereby, the applicant is not required to obtain registration under GST: AAR