In re Habufa Meubelen B.V. (Indian Liaison Office) (GST AAR Rajasthan)
If the liaison office in India does not render any consultancy or other services directly/indirectly, with or without any consideration and the liaison office does not have significant commitment powers ,except those which are required for normal functioning of the office, on behalf of Head Office, then the reimbursement of expenses and salary paid by M/s Habufa Meubelen B.V. (HO) to the Liaison Office, established in India, is not liable to GST and the applicant i.e. M/s Habufa Meubelen B.V. Jaipur, is not required to get itself registered under GST.
FULL TEXT OF ADVANCE RULING
(A) SUBMISSION OF APPLICANT:
1. M/s. Habufa Meubelen B.V. (hereby referred to as HO), is a company originally incorporated in Netherlands.
1.1 The applicant is the Indian Office of M/s. Habufa Meubelen B.V.(HO) which is established as a Liaison Office at C-36, Raghu Marg, Main Hanuman Nagar, Vaishali Nagar, Jaipur (Raj.) w.e.f. 18.12.2007, with the prior permission of RBI subject to various conditions.
1.2 The conditions of Indian Office of M/s. Habufa Meubelen B.V. are:-
a Except proposed liaison work, the office in India shall not undertake any activity of a trading, commercial or industrial nature nor shall it enter into any business contracts in its own name without RBIs prior permission. No commission/ fees shall 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.
b. The entire expenses of the office in India will be met exclusively out of funds received from abroad through normal banking channels
c. The office in India will not render any consultancy or any other services directly/ indirectly with or without any consideration The office in India will not have significant/ commitment powers, except than those which are required for normal functioning of the office, on behalf the Head Office.
d. The office may approach any AD Category-I Bank in India to open an account to receive remittance from Head Office outside India. Credits to the account shall be the funds received from Head Office through normal banking channels for meeting expenses of the office.
e. All the liabilities in India including arrears of gratuity and other benefits to employees etc. of the branch/ office will be met or adequately provided for by HO.
1.3 The liaison office does not have any independent revenue or clients. The office has been established for the purpose of liasoning with the suppliers with regard to quality control of goods. The purchase order or contracts are entered with the clients with the HO and liaison office does not enter into any contract with the clients. Payments for the supplies are made by HO directly to the account of supplier and all the expenses incurred by liaison office is claimed from HO as per clear instructions of RBI.
