According to a report in Economic Times, the Central Government may soon impose Goods and Services Tax (GST) on the inter-State services provided by the office of a company in one state to another office.
Those eligible can claim the input tax credit and a circular sanctioned by the GST Council which would enumerate the particulars would be sent out soon, the paper stated. Companies from the power, healthcare, liquor, and education sectors would, however, be exempt.
Earlier, the Karnataka Authority for Advance Rulings (AAR) held that the human resource and payroll tasks carried out by companies across states would face GST and have invoices issued. It is this circumstance, the government is moving ahead to tax the companies for such services.
The GST Council’s law committee will, via the circular, clarify issues such as head office functions, payroll, procurement, distribution and management expenses, branch maintenance, etc. The circular would be in FAQ format and lay down particulars for distribution of tax between head office and branches, the report added.
