Only salary remitted by HO to liaison office set-up in India for routine operations: No GST would be attracted.


Only salary remitted by HO to liaison office set-up in India for routine operations: No GST would be attracted.

[Habufa Meubelen B.V., In re – [2018] (AAR- Rajasthan)]

Facts of the case:

  • Habufa Meubelen B.V is a company having originally incorporated in Netherlands.


  • The applicant company is the Indian office of the above mentioned company and act as liaison company subject to conditions specified by the RBI.



Following observations were made by the authority:

  • Liaison company has not right to undertake any activity of trading or shall not enter into any contract with the prior approval of RBI.
  • Other than above, liaison office does not have right to render any consultancy or any other services with or without any consideration except than those which are required for normal functioning of the office, on behalf the head office.
  • Also liaison office does not have any independent client or revenue and also the purchase order or contracts are entered with the clients directly with the H.O.
  • Payments for the supplier are made by the H.O. directly to the account of supplier and all expenses incurred by the liaison office is claimed from H.O. as per clear instructions of RBI. Also the entire expenses was bear by the H.O. by remitting the funds from abroad through normal banking channel
  • Therefore, the reimbursement of expenses and salary paid by head office to liaison office is not liable to GST. As it is just reimbursement of expenses taken places between H.O. and liaison office.


  • Further, as no taxable supplies are made by the liaison office, they are not required to get registered under GST.