Relationship of head office and branch office: In the nature of a Pure Agent?

Jigar Doshi & Yash Goenka – [2022] 137 taxmann.com 41 (Article)

The saga of common expenses incurred by Head Office (HO) on behalf of Branch Office (BO) and its taxability under GST has undergone several rounds of deliberation and discussions. However, somehow, there is still no clarity available on the subject. Another issue similar to the subject is whether the salaries of CEOs and other common teams such as finance, legal, taxation, human resources etc. should be distributed across all states or should be absorbed by the head office itself.

In this article, the authors have discussed the issue of taxability of supplies between HO and BO in light of recent decision of Maharashtra Appellate Authority for Advance Ruling in case of Cummins India Ltd. In re [2022] 134 taxmann.com 342.

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