The Authority of Advance Ruling (AAR), Maharashtra ruled that the Goods and Service Tax is payable by the Liaison office of Dubai Chamber of Commerce and Industry as services provided to various businesses in India and Dubai.
The applicant, Dubai Chamber of Commerce and Industry, Liaison office is established by DCCI UAE in Mumbai, Maharashtra. Applicant is also a non-profit organization, formed to represent, support and protect the interests of the Dubai business community in India, by creating a favourable environment, promoting Dubai businesses and by supporting development of business in India.
Under the ambit of RBI norms, applicant shall undertake liaison/representation activities in India namely Liaison between India office and Dubai office, Attending and representing DCCI in various seminars, conferences & trade fairs and Connecting businesses in India with business partners in UAE and vice versa Organizing events & interactions with Indian stakeholders for sharing information about Dubai.
All expenses incurred by applicants (predominantly office rent, salaries, consultancy services), are to be reimbursed from DCCI UAE on a cost-to-cost basis. Applicant is not a separate legal entity, rather it is a mere extension of DCCI UAE. Reimbursement of expenses received from DCCI UAE cannot be treated as consideration under GST law and hence. Applicants are not liable to obtain GST registration.
The applicant has sought the advance ruling on the issue whether activities performed by DCCI LO shall be treated as supply under GST law.
The coram of P.Vinitha Sekhar and T.R.Ramnani noted that activities undertaken by the DCCI is nothing but “Business”. The terms “Supply” and “Business” are defined under GST Act, in an inclusive manner and have wide connotations. Hence the reply filed by the applicant to cross objection is incorrect. Activities undertaken by the applicant are covered by the scope of word “commerce”, “Business” and also covered under the scope of “Supply”.
The AAR ruled that the applicant is receiving consideration from its Head Office in excess of expenses incurred by it, and the applicant cannot be treated as a non-profit organization. Also, the application is providing intermediary services for which it is liable to pay GST.
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