The authority for advance rulings (AAR), Maharashtra has recently ruled out that the services to the World Economic Forum (WEF) by the liaison office (LO) from India will not be attracting GST as there is no furtherance of service or business of this service.
WEF office of liaison is a non-profit organization to shift Indan economy in the country. The AAR has said that the services rendered are not going further for any business to the WEF by the liaison office and only the activities specified by the RBI would be undertaken.
Another relief comes as no registration is required for the applicant as per the CGST act. The AAR was earlier not clear on certain decisions and has made multiple confusing decisions.
As per the tax expert, “Therefore, one needs to understand the exact nature of activities undertaken in India and evaluate whether the LO qualifies as an intermediary, before finalizing the tax position.”
Dubai Chamber of Commerce and Industry LO was earlier asked to pay the GST as it was offering services to the connecting partner in the business in Dubai in India as held with the Dubai Head Office (HO). The services were considered under the Integrated GST act.
On the contrary, the Karnataka Appellate AAR over the Fraunhofer-Gesellschaft Zur Forderung issue as per the LO in Bengaluru does not amount to the supply of services. The AAR ruling subsided the liaison activities being GST supply in the CGST Act and further the GST is required to be paid.
While the Takko Holding GmbH was freed from the payment of GST as it was just doing the communication partner within the company and the Indian suppliers. Another tax expert mentioned that “The ruling provides requisite clarity on non-levy of GST on such offices which are restricted to conduct any business activity under the regulations.”
