Quick Summary
CBIC has said it is examining the issue related with taxability of activities performed by the office of an organisation in one State to the office of that organisation in another State. Technically, it is called cross charges and mainly involves remuneration paid to Chief Executive Officer (CEO)
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FAQ :
Cross charges refer to services provided by an organisation's office in one state to its office in another state. This often involves remuneration paid to top management and services from departments like HR and accounting.
The CBIC is examining cross charges to clarify how GST is calculated and attributed when head office staff provide services to multiple branches registered in different states.
No, under GST law, payments made under an employer-employee relationship are not chargeable to GST and are not treated as a supply of service due to the employment contract.
A draft circular suggested that a head office and a branch office in different states are considered distinct persons. It stated that the head office provides services to the branch office, and the cost incurred by the head office, including employee salaries, could attract GST.
No, the matter is still under examination by the CBIC. A draft circular was circulated previously but was suggested for further examination by the Law Committee.
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