Salary cost to be included in valuation for cross charge for supply of services between head office and branch office or vice versa

Last updated: 21 January 2022

Court :
AAAR, Maharashtra

Brief :
The AAAR, Maharashtra in the matter of M/S. Cummins India Limited [Advance Ruling No. MAH/AAAR/AM-RM/01/2021-22 dated December 21, 2021] held that head office using all its human resources to facilitate the operational requirements of the branch offices/units by way of procuring common input services on behalf of the branch offices/units thereby, providing the services, therefore, allocation and recovery of any amount including its employees salary cost from the branch offices/units will be subject to GST. Hence, the allocation and recovery of the salary of the employees of the head office from the branch office/units will be subject to GST.

Citation :
Advance Ruling No. MAH/AAAR/AM-RM/01/2021-22 dated December 21, 2021