The Maharashtra AAR on May 24 held that the activities of the liaison office of supplying services as an intermediary that connects Indian Business with Dubai Head Office falls within the purview of commercial activities and consequently subject to GST.
The implications for the aforesaid ruling are that the above-mentioned entity shall have to register itself in India and pay GST 
The applicant, Liaison Office of Dubai Chamber of Commerce & Industry (DCCI), delivers services of interlinking ‘business partners in Dubai’ with ‘businesses in India’ for compensation from the Dubai Head Office. It approached the Maharashtra AAR with the below-mentioned queries:
- Whether activities that are performed by Dubai Chamber of Commerce & Industry (DCCI) shall be considered as supply under the prevailing GST law,
- Whether DCCI has to obtain GST registration
- Whether DCCI is liable to pay GST in India.
Finally AAR, Maharashtra replied affirmative to the above-mentioned three questions. The AAR, Maharashtra confirmed the findings of the jurisdictional officer that. The applicant ‘DCCI’ shall not be considered a non-profit organization for its activities of supply of services for consideration.
The AAR, Maharashtra dismissed the applicant’s (DCCI) assertion that the meaning of commerces includes within its domain only buying and selling of goods and services and that too especially in large amounts. The AAR Maharashtra commented that anything which assists trade comes within the domain of Commerce. The Authority further commented that the applicant’s activities come within the definition of commerce.
Maharashtra AAR Commented that
- On the one hand, The applicant ‘DCCI’ submitted before it that it is not conducting any supply while on the other side
- The DCCI links business in India with the business in Dubai that simply supplies a service for a consideration,
Contradictory Rulings on the Same Issue
- Karnataka AAAR held in the matter of ‘Fraunhofer-Gesellschaft Zur Forderung’ that the carrying of the activities of liaison office that is located in Bengaluru and permitted by the RBI does not lead to ‘supply of service’ and set aside the AAR ruling which held that the liaison activities that are being done by the appellant come within the domain of supply under Section 7 of CGST Act
- Secondly, Similarly, Tamil Nadu AAR held in the case of ‘Takko Holding GmbH’ that liaison activities that are done by the applicant as a communication channel between the parent company and Indian supplier of goods that are in tune with the terms and condition defined by the RBI’s permission letter do not amount to ‘supply’ as per the prevailing GST law
- The above-mentioned order is in sync with the Rajasthan AAR’s order in the case of ‘Habufa Meubelen B.V.’
The throw away from the above discussion is that contradictory rulings in similar facts and circumstances create a lot of uncertainty.
