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GST on services supplied by HO to inter state branches

21 December 2018

The accounting work namely passing entries etc. of inter state branches is done by employees at head office. Should GST be charged on such service? If so how the valuation is to be done?

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4 Replies

khushboo baheti (39 Points)
Replied 22 December 2018

Such services shall be considered as supply as per àa

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Hari Prasad Menon (18 Points)
Replied 22 December 2018

Can u please share the aa ruling? But how the valuation is to be done?

khushboo baheti (39 Points)
Replied 22 December 2018

Apologies for the typographical error,
Sir, the services provided by an employee to the employer in the course of his employment are not liable to GST as per para 1 of Schedule III.
So, GST won't be chargeable on such services.

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 23 December 2018

According to an order passed by the Karnataka bench of the Authority for Advance Ruling (AAR), the activities between two offices is treated as supplies under the GST law.

It said the valuation of supply will include all costs, including the employee cost provided by one distinct entity to the other distinct entities.

Above is Decision made By Karnatka AAR. As its not applicable /binding on Every Taxpayer .
Actually this AAR judgement have created more confusion & litigation in provsion of GST Law. Thats why it is being recommend in 31 GST council meeting that AAR is to be Centralised not to be state wise

Hence As per Schedule III its not a supply so NO GST attracts