Tex Mark Inc. of USA, established a liaison office in Mumbai for the purpose of liaisoning with the suppliers for purchase of raw materials. The purchase orders or contracts were entered into with the suppliers directly

Liaison office: Whether liable for registration The liaison office does not undertake any activity of trading, commercial or industrial nature. It does not enter into any business contracts. It does not charge any commission, fee or remuneration for the liaison activities / services rendered by it either from the suppliers or from the head office. The head office merely reimburses the expenses incurred by the liaison office on actual expenditure basis without any mark up. There is no source of income for the liaison office and it is solely dependent on the head office for all expenses incurred by it and therefore the head office and liaison office cannot be treated as separate persons. The liaison office does not render any consultancy services directly or indirectly with or without consideration and does not have significant commitment powers. The amount received by liaison office hence cannot be treated as amount received towards supply of service. Since it is not in furtherance of business of the liaison office, it is not required to get registered under GST . Case law reference: Habufo Meubelan B.V. 2018(14) G.S.T.L 596 (A.A.R-GST)