In Re : M\/s. Takko Holding GmbH
GST
2018 (10) TMI 1315 – AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – 2018 (19) G. S. T. L. 692 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – AAR
Dated:- 27-9-2018
ORDER No. 14\/AAR\/2018
GST
Ms. Manasa Gangotri Kata, IRS, Member, CGST And Shri. S. Vijayakumar M.Sc., Member (FAC),TNGST
\nRULING
\nAt the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act.
\nTakko Holding GmbH is a company incorporated in Germany. They are permitted by RBI to have a Liaison Office of the company at 1\/1 J-16, Thannerpandal Colony, Avinashi Road, Anupparpalayam, Tirupur-64<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n from\/to India = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n and send the final documents to German office through the respective supplier after effecting the shipment; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s the Indian Supplier; there are no furtherance of business, no consideration and no supply as per GST; there are no foreign consultants of the liaison office. Takko further furnished documents relating to the details of order placement, procurement, quality checking activities along with documentary support; sample Invoice for ordcr placcd with the manufacturer; RBI Permission letter; Statement of Accounts & Income-Tax Returns, Inward Remittance Report and sample invoices for the expenditure, appointment letter and Payment document of any one employee, detailed write -up of activities. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n arments as per the order sheet received in terms of the design, sampling, quality assurance checks, and audit after production. They also coordinate with the supplier for shipping the goods. The purchase orders for procurement of readymade garments are raised only by the German office on the suppliers in India and Letter of Credit is opened by the German office to the supplier's Bank who raises invoices on the German Office and exports the goods. Takko do not receive any consideration from the Indian exporters. The advance ruling is sought on Whether liaison office is liable to pay GST? whether a liaison office is required to be registered under GST Act? Whether the Activities of a liaison office amount to supply of services? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n eceived\/ income being earned by the office in India for the liaison activities\/ services rendered by it. The HO, reimburses the expenses incurred by Takko for their operations in India which are in the nature of salary, rent, security, electricity, travelling etc. They do not have any other source of income. Further the liaison office is strictly prohibited to undertake any activity of trading, commercial or industrial nature or entering into any business contracts in its own name. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re : M\/s. Takko Holding GmbHGST2018 (10) TMI 1315 – AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – 2018 (19) G. S. T. L. 692 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULINGS, TAMIL NADU – AARDated:- 27-9-2018ORDER No. 14\/AAR\/2018 GSTMs. Manasa Gangotri Kata, IRS, Member, CGST And Shri. S. Vijayakumar M.Sc., Member (FAC),TNGST RULING … Continue reading “In Re : M\/s. Takko Holding GmbH”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-14643","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14643"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14643\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n (3) Promoting technical\/financial collaborations between parent\/group companies and companies in India
\n (4) Acting as communication channel between the parent company and Indian companies (supplier of goods to parent company at Germany)
\nOut of the above activities allowed, Takko is performing only one activity – Acting as communication channel between the parent company located outside India and Indian companies. Except the proposed liaison work, the office in India, not to undertake any activity of trading, commercial or industrial nature nor they enter into any business contract in their own name without prior permission. No commission\/fees be charged or any other remuneration received\/income earned by the office in India for the liaison activities\/services rendered by it or otherwise in India.
\n2.2 The activities of Takko are :
\n (1) Order enquiries are received from Germ<\/p>\n
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\n (7) Admin Department coordinates for the overall administration of Takko;
\n (8) All the administrative expenses are met by the German office, (i.e. as per RBI instruction in their approval; the entire expenses of the office in India is met exclusively out of the funds received from abroad through normal banking channels).
\n2.3 They have stated that under GST supply includes all forms of suppiy made for a consideration by a person in course or furtherance of business. For activity of Liaison office, no consideration is being received. The Liaison office is maintained by inward remittances from German office to meet expenses. Hence, activities are not a supply. It will not come under S1. No. 2 of Schedule I as services without consideration from related persons or distinct persons as German Office and Liaison Office are<\/p>\n
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\n3.2 All documents submitted by the applicant were examined. It is seen that RBI has permitted M\/s Takko Holding GmBH, Germany to establish a Liaison Office in Tirupur, Tamil Nadu as they are engaged in trading of clothing & textiles and operates clothes shops and markets. The Liaison office has been permitted to undertake only the limited set of activities as listed in para 2.I above. No other activiti<\/p>\n
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\n4.1 The advance ruling is sought on
\n 1. Whether liaison office is liable to pay GST?
\n 2. Whether a liaison office is required to be registered under GST Act?
\n 3. Whether the Activities of a liaison office amount to supply of services?
\nThe above ques<\/p>\n
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\n4.3 In order to be a supply liable to GST, an activity has to fall under Section 7 of the CGST Act, 2017 which reads as under:
\n 7 . (1) for the purposes of this Act. The expression “srtpplg” includes-
\n (a) all forms of supplg of goods or seruices or both such as sale, transfer, barter, exchange, licence, renta| Iease or disposal made or agreed to be made for a consideration bA a person in the course or furtherance of business:
\n (b) import of seruices for a consideration whether or not in the course or <\/p>\n
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