The Maharashtra Authority of Advance Ruling (AAR) ruled that no GST was payable by the Liaison Office of World Economic Forum on services received from Head Office (HO).
The applicant, the World Economic Forum (WEF) is a public interest, not-for-profit organization set up in 1971 and based in Switzerland, operates as an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to share global, regional and industry agendas.
The World Economic Forum, India Liaison Office has sought clarification on whether the activities carried out by the Applicant’s Head Office (HO) located outside India would amount to Supply under Section 7 of the Central Goods and Services Tax Act, 2017 (CGST Act) and if the same would be liable to Goods and Service Tax (GST) in the hands of the applicant. Along with that, the Applicant has also seeked clarification on whether it would be required to obtain registration in India under Section 24 of the CGST Act for the activities rendered by HO outside India considering the applicant is not engaged in any business.
The Coram of Rajiv Magoo and T.R.Ramnani in the light of Section 7(1)(b) and Schedule 1 of the CGST Act as well as relying on Schedule II of Notification No. 20/2000-RB dated May 03, 2000, of Foreign Exchange Management Act, 1999 (FEMA Notification) which specifies the permitted activities for a Liaison Office in India, observed that the Applicant is not undertaking any business and therefore the activities of services received by the Applicant from its HO cannot be said to be in course of furtherance of business, thus cannot be considered as “Supply” under section 7 of the CGST Act.
The AAR further held that as long as the services imported by the applicant from its HO are not used in the course of business, the Applicant is not liable to pay GST on such transactions. Being a corollary in the import of service in the current case and not be considered a supply, there is no requirement of registration under Section 24 of the CGST Act by the Applicant.
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