Also, whether the lump sum amount charged by the registered/corporate office on its group companies would be liable to Goods and Services Tax (GST).
Passing its ruling, the Maharashtra AAR held that managerial and leadership services by corporate office to its group companies and other construction sites registered in different States is “supply of service” and would be taxable under GST.
AMRG & Associates Senior Partner Rajat Mohan said this ruling would mean an additional levy of 18 per cent GST on the inter-company services in the form of managerial and leadership services irrespective of whether consideration has been charged for the same or not.
“This ruling would severely impact corporates operating through a network of multi-locational companies, whereby tax is payable on managerial and leadership services supplied from the corporate office to all group companies. Accurate valuation and estimation of such administrative and leadership services on a monthly/quarterly basis could be a big issue for all large corporate houses,” Mohan added.
Courtesy – economictimes.indiatimes.com