GST: SITE WHERE EMPLOYEES ARE DEPUTED FOR MACHINE MAINTENANCE QUALIFIED AS FIXED ESTABLISHMENT & HENCE REGISTRATION IS REQUIRED
AAR in WB AAR. in the case of M/S IZ-CARTEX.
-The applicant is an Indian branch of a Russian entity by the same name which has entered into Maintenance and Repair Contract with an Indian Client with respect to the machinery and equipment supplied by it.
– The applicant has sought advance ruling to know whether it is liable to pay GST on forward charge basis or the client would be liable on reverse charge basis on the above Maintenance and Repair contract.
The Authority of Advance Ruling (‘AAR’) observed that the Supplier is responsible for supply of the spares, components, and consumables over the entire period.
It will depute the officers, support staff, and system expert at the site for Maintenance and Repair of Equipment and train the Client’s personnel.
– The consideration is to be paid at an agreed rate for supervision, supply of spares, and consumables.
– It is held by the AAR that supplier maintains suitable structures in terms of human and technical resources at worksite and concluded that the site would qualify as fixed establishment.
– Given this, it is held that location of supplier for supply of services is in India and the transaction would not qualify as import of service.
– The supplier shall be liable to pay GST under forward charge basis.