No GST on salary remitted by HO to liaison office in India for normal functioning of liaison office: AAR

Habufa Meubelen B.V., In re - [2018] 95 taxmann.com 120 (AAR- Rajasthan) 

The assessee is the Indian liaison office of a company incorporated at Netherlands. It shall not undertake any activity of a trading, commercial or industrial nature, except activities required for normal functioning of office. The salaries of the employees are remitted by HO to liaison office. The HO also reimburses the other expenses incurred by liaison office for their operation. 

The assessee filed an application for Advance Ruling on the issue ‘whether the reimbursement of expenses and salary is liable to GST and whether it is required to get registered under the GST? 

The Authority for Advance Ruling held that the liaison office in India does not render any consultancy or other services directly or indirectly. Therefore, the reimbursement of expenses and salary paid by head office to liaison office is not liable to GST. Further, no taxable supplies are made by the liaison office. Therefore, they are not required to get registered under GST.