Employee Cost Allocable To Branches Taxable Under GST - AAR, Karnataka

The Authority for Advance Ruling (AAR), Karnataka has ruled that activities carried out by the employees from Corporate Office (CO) for accounting and other administrative functions with respect to units in other states and other expenses incurred by CO which are allocated to other registered units should be treated as "supply" and hence taxable under GST.

Facts

• The applicant, i.e., Columbia Asia Hospitals Private Limited has its CO in Karnataka and hospitals in six different states.
• Some of the activities for all the units with respect to accounting, administration and maintenance of IT system are carried out by the employees from CO which forms part of the registered person in Karnataka.