GST on services provided by Liaison Office as an intermediary

Goods and Services Tax (GST) is a comprehensive indirect tax that has been implemented in India to replace a variety of taxes levied by the central and state governments. GST has been introduced to simplify the tax structure for businesses and to make it easier for them to comply with the tax laws. However, the implementation of GST has been quite complex, and many businesses are still struggling to understand the various provisions of the law.

In this article, we will discuss the GST implications on services provided by a Liaison Office as an intermediary.

What is a Liaison Office?

A liaison office is a representative office established by a foreign company for the purpose of exploring and understanding the business and investment opportunities in India. The main objective of a liaison office is to provide a communication link between the parent company and the Indian companies that are interested in doing business with the parent company.

The activities of a liaison office are restricted to the following:

1. Providing information about the parent company and its products and services to potential Indian customers;

2. Promoting the parent company's products and services in India;

3. Facilitating technical or financial collaborations between the parent company and Indian companies;

4. Acting as a communication channel between the parent company and the Indian companies;

5. Any other activity that is permitted by RBI from time to time.

GST implications on services provided by a Liaison Office as an intermediary

The GST implications on services provided by a Liaison Office as an intermediary are governed by the Place of Supply rules under the GST law. The Place of Supply rules determine the place of supply of the goods or services and the taxes that apply to them.

According to the GST law, the place of supply for services provided by a Liaison Office as an intermediary will be determined based on whether the services are provided to a registered person or an unregistered person. If the services are provided to a registered person, the place of supply will be the location of the registered person. If the services are provided to an unregistered person, the place of supply will be the location of the Liaison Office.

In case the Liaison Office is located outside India, the place of supply will be determined based on the provisions of the Integrated Goods and Services Tax (IGST) Act. According to the IGST Act, if the place of supply of services is outside India, then the services will be treated as an export and will be zero-rated under the GST law.

The Liaison Office is required to register under the GST law if its aggregate turnover in a financial year exceeds the threshold limit of Rs. 20 lakhs. Once registered, the Liaison Office will be required to comply with various provisions of the law, such as filing of returns, payment of taxes, etc.

Conclusion

In conclusion, the GST implications on services provided by a Liaison Office as an intermediary are determined by the Place of Supply rules under the GST law. It is important for businesses to understand the various provisions of the law and to comply with them in order to avoid any penalties or legal issues. If you have any queries or doubts regarding the GST implications on services provided by a Liaison Office as an intermediary, it is recommended that you seek the advice of a qualified tax professional.