Clarification on taxability of services between distinct offices under GST

Circular No. 199/11/2023

Clarification on taxability of services provided by an office of an organisation in one State to the office of that organisation in another State, both being distinct persons:

• In case of common input services procured from third party and attributable to the distinct persons, ITC can be distributed through ISD mechanism or can be cross charged.

• Where full ITC is attributable to Branch office, cross charge value shall be deemed as open market value.

• Where full ITC is not available, cost of employee salary is not mandatorily required to be included while computing the taxable value of supply of such services.

Authored by Vanshika Gupta

Hey, it's Vanshika Gupta, a CA Finalist, who has graduated from Dr. Bhim Rao Ambedkar College, University of Delhi(DU). Working as an Associate II at Nucleus Advisors, I am passionate about indirect taxation and have experience in it. You can reach me at Vanshika.gupta@nucleusadvisors.in  

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