GST: Managerial, Leadership Services provided by Corporate Office to its Group Companies covered under ‘Supply of Service’, rules AAR [Read Order]

The Maharashtra Authority of Advance Ruling (AAR) ruled that managerial, leadership services provided by the Corporate Office to its Group Companies covered under “supply of service”.

The applicant, M/s. B. G. Shirke Construction Technology Pvt. Ltd, the applicant’s Registered/ Corporate Office is in Pune. The “Shirke Group” is in the business of Civil Construction, Structural Engineering, Fabrication & Erection of Transmission Tower Materials, and Aviation Chartering, etc.

The applicant has sought the advance ruling on the issue of whether the managerial and leadership services provided by the Registered/Corporate Office to its Group Companies can be considered as “supply of service”, in terms of Section 7 of CGAT Act, 2017.

The coram of Rajiv Mangoo and T.R.Ramnani held that the managerial and leadership services provided by the Registered/Corporate Office to its Group Companies can be considered as “supply of service”, in terms of Section 7 of CGAT Act, 2017 and the lump sum amount charged by the Registered/Corporate Office on its Group Companies would be liable to GST under Section 8 of CGST Act, 2017.

The AAR further ruled that 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 of CGST Rules, 2017, as most of the recipients of such services are eligible for full credit, barring one or two related persons, who would comply with the provisions of Section 17 of CGST Act, 2017, at their respective ends.

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