No GST on WEF’s Liaison Office, Rules AAR

In a relief to the World Economic Forum (WEF), the Authority for Advance Ruling in Maharashtra has said that the forum’s liaison office in India is not liable to goods and services tax (GST) on services tax (GST) on services received from the head office. As a consequence of the ruling, the India liaison office does not need to be registered locally. “Whether the activities carried by the applicant’s head office located outside India and rendered to the applicant will amount to supply considering that the applicant is not engaged in any business? Answered in the negative,” the authority ruled on August 20.

The authority also answered in the negative on the questions of whether activities carried by WEF’s head office overseas and rendered to the liaison office was liable to GST locally and whether the liaison office would need to obtain registration under the Central GST Act.

Experts said the ruling will provide relief to liaison offices of various forums but also lead to confusion on taxability since the Central Board of Indirect Taxes and Customs (CBIC) has not taken up the issue for clarity. “Liaison office is an extension of the foreign company that operates in India after permission from RBI (Reserve Bank of India), but tax officers are unable to agree on a common code for taxability of liaison offices in India, which is a significant risk area for the entire industry,” said Rajat Mohan, senior partner at AMRG Associates. S-ET

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