Profisolutions (P) Ltd., In re – [2023] (AAR-Tamil Nadu)
The applicant is registered in the state of Karnataka, while the state of Tamil Nadu (Chennai) is where its branch office is registered. Through regular firm personnel, the branch office supports the head office in Karnataka with support services including engineering, design, accounting, etc. The workers are appointed to the company as a whole and are not explicitly engaged by the head office or the branch.
The applicant inquired about the taxability of services rendered by a branch office in one state to the head office in another state through common employees with the Authority of Advance Ruling of Tamil Nadu (hereinafter referred to as “TN AAR”).
The TN AAR noted that a branch employee’s service to the central office only passes through the branch. Additionally, it is stated that as long as the employee is working in a branch office of an organisation, any services he provides there directly will be done so in that capacity.
Given the foregoing, the TN AAR determined that the services of employees transferred from one registered location of a person’s business to another registered location of the same person will be subject to GST because the employees are considered “related persons” under Section 15 of the CGST Act, 2017’s explanation, and they are viewed as supplies under Entry 2 of Schedule I of the said Act.
