The managerial and leadership services provided by the Registered/Corporate Office to its Group Companies are considered as “supply of service”, in terms of Section 7 of CGST Act, 2017.
Authority for Advance Ruling – Taxability on Treated Waters – The applicant is in the business of Civil Construction, Structural Engineering, Fabrication & Erection of Transmission Tower Materials, and Aviation Chartering, etc. The applicant sought an Advance Ruling as to whether the managerial and leadership services provided by the Registered/Corporate Office to its Group Companies can he considered as “supply of service”, in terms of Section 7; whether the lump sum amount charged would be liable to GST; if the aforesaid activities are treated as “supply of service” between distinct and related persons and GST thereon is held to be payable, whether the Applicant can continue to charge certain lump sum amount, as has been done in the past, in terms of second Proviso to Rule 28; if the aforesaid method of charging certain lump sum amount is not permissible, whether the Applicant can adopt the valuation in terms of the provisions of Rule 31, by arriving at a proportional ratio, based on the total expenses incurred by Registered/ Corporate Office for supplying the aforesaid services and turnover of each of the distinct and related persons; if the aforesaid method of valuation under Rule 31 of CGST Rules is also not permissible, whether the Applicant can adopt valuation in terms of Rule 30, by allocating related expenses at the Registered/Corporate Office in a reasonable proportion to the distinct and related persons considering turnover of each of them and adding ten percent, which would be at par with 110% of cost of provision of such services; if any of the aforesaid method of valuation suggested by the Applicant is not acceptable, what alternative feasible workable method of valuation that can be suggested by the Advance Ruling Authority considering the nature of industry in which the Applicant is engaged in; whether input tax credit of GST paid by the Applicant is admissible to each of the distinct and related person, in a case where their supply of goods or service or both are taxable under GST law.
Held that:- The Hon’ble Authority for Advance Ruling answered question no. 1 to 3 in the affirmative. Further, in respect of other questions, the authority not answered.
The managerial and leadership services provided by the Registered/Corporate Office to its Group Companies are considered as “supply of service”, in terms of Section 7 of CGST Act, 2017.
Authority for Advance Ruling – Taxability on Treated Waters – The applicant is in the business of Civil Construction, Structural Engineering, Fabrication & Erection of Transmission Tower Materials, and Aviation Chartering, etc. The applicant sought an Advance Ruling as to whether the managerial and leadership services provided by the Registered/Corporate Office to its Group Companies can he considered as “supply of service”, in terms of Section 7; whether the lump sum amount charged would be liable to GST; if the aforesaid activities are treated as “supply of service” between distinct and related persons and GST thereon is held to be payable, whether the Applicant can continue to charge certain lump sum amount, as has been done in the past, in terms of second Proviso to Rule 28; if the aforesaid method of charging certain lump sum amount is not permissible, whether the Applicant can adopt the valuation in terms of the provisions of Rule 31, by arriving at a proportional ratio, based on the total expenses incurred by Registered/ Corporate Office for supplying the aforesaid services and turnover of each of the distinct and related persons; if the aforesaid method of valuation under Rule 31 of CGST Rules is also not permissible, whether the Applicant can adopt valuation in terms of Rule 30, by allocating related expenses at the Registered/Corporate Office in a reasonable proportion to the distinct and related persons considering turnover of each of them and adding ten percent, which would be at par with 110% of cost of provision of such services; if any of the aforesaid method of valuation suggested by the Applicant is not acceptable, what alternative feasible workable method of valuation that can be suggested by the Advance Ruling Authority considering the nature of industry in which the Applicant is engaged in; whether input tax credit of GST paid by the Applicant is admissible to each of the distinct and related person, in a case where their supply of goods or service or both are taxable under GST law.
Held that:- The Hon’ble Authority for Advance Ruling answered question no. 1 to 3 in the affirmative. Further, in respect of other questions, the authority not answered.