Issue Involved-whether providing service by branch office in one State to head office in another State through employees who are common to the company constitute supply of service in terms of Section 7 the Act, if so, whether such services attract GST liability.
Fact of the case- The Profisolutions Private Limited registered under the Companies Act 2013, providing engineering services for industrial and manufacturing projects.The branch office of the applicant is providing support services like engineering services, design services, accounting services, etc to the Head Office at Bangalore and also registered in the State of Karnataka under GST Act. The employees are appointed and working for the company as whole and not employed for head office or branch specifically.
Held that-Shri R. GopalSamy and Tmt. N. Usha has observed that even the services of employees deployed in a registered place of business to another registered premises of the same person, as the employees are treated as related person in terms of explanation to Section 15 and treated as supply by virtue of Schedule I (2) to CGST Act, 2017.The applicant states that employees are appointed and working for company as whole and not employed for head office or branch specifically, while recognizing the legal position that head office and branch office are distinct person under GST. It is obvious that service of an employee working in a branch flows only through the branch to the head office or customer. As long as the employee is deployed in a branch of an entity, his services that is rendered directly to head office will be in his representative capacity as an employee of the branch.AAR held that "Services, including the 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 under respective Acts, viz IGST Act, 2017 or CGST Act, 2017 and SGST Act, 2017 or UTGST Act, 2017."
Profisolutions Private Limited (TAMILNADU-AAR)
Order No. 07/ARA/2023
Comment: