Question

a)the subsidiary company books employee expense by paying salary to holding company for deputation of employees by holding company. only salary is paid to them.since related party any gst to be levied for this transaction, pl confirm. how to value these services  ie the value of the same. also the subsidiary reimburse the esop costs to employees of holding company, whether taxable under gst.
b)the subsidiary registered office is located in corporate office of holding company and its gst registration is at its works office in the same state. query= whether the subsidiary needs to pay gst for registered office since related party and no consideration, but in gst taxable. pl clarify. if the corporate office is at some other state then same query as above but in addition do the subsidiary needs to get the registration under gst of the registered office.
c)if the employees of this subsidiary company gets perquisites ie gift vouchers, telephone expense reimbursement, drriver salry, accomodation. petrol reimbursement, etc if these perquisites are included in terms of appointment, then no gst on the same, pl confirm that the limit of 50000(employer to employee) shall be considered in thse perquisites or not, pl clarify what expenses to be considered for this 50000 limit.
d)authorised signatory to sign invlices or resolution of a company authorising another office to sign invlcies shall suffice as it is practically impossible for the authorised signatory.

Answer

a) & b) To make it easy to understand we are making your question simple as follows:

Ques: If there are 2 related Companies and first Company is providing any kind of facility to second Company whatever it is whether this facilitation will attract GST?

Ans: If first Company is providing any facilitation to second Company in whatever mode it will always attract GST as per clause 2 of Schedule I of CGST Act. If A Company is making payment to employee of B Company and receiving this payment from B Company. This is also a kind of facility although the principal of pure agent will apply. The value of service will not include amount of payment made to employee of B Company. But the tax will be charged on facility charges as per open market value. Even when no invoice is raised on account of facilitation charges by A to B.

Likewise B is using some office space in the office of A. This is also a facility and will attract GST. On the rental value of the space as well as office facilities used by B.

c) If the perquisites given to employees are part of salary and appearing in FORM 16 of Income Tax then it is not considered as supply by virtue of Clause 1 of Schedule III of CGST.

However limit of 50000/- in GST is applicable on Gifts given to employees over and above salary that are not decided at the time of employment and are not part of salary (CTC).

Although a different opinion may be formed by GST Officer by considering Kerala Advance Ruling in case of M/s Caltech Polymers Pvt. Ltd. v/s Senthil Nathan S, IRS Joint Commissioner, N. Thulaseedharan Pillai, Joint Commissioner (General)

But our observation is as mentioned above.

d) As per Rule 46 (q) Invoice contains the signature or digital signature of the supplier or his authorised representative:

Supplier & Authorized representative has been defined in section 2 (105) and 2(15) as follows:

SECTION 2 OF CGST ACT

(105) 'supplier' in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied.
(5) 'agent' means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another;

(15 ) Authorized representative means the representative as referred to in section 116.

Further, section 116(2) provides that, for the purposes of this Act, the expression “authorized representative” shall mean a person authorized by the person referred to in sub-section (1) of 116 to appear on his behalf, being—

(a) his relative or regular employee; or

(b) an advocate who is entitled to practice in any court in India, and who has not been debarred from practicing before any court in India; or

(c) any chartered accountant, a cost accountant or a company secretary, who holds a certificate of practice and who has not been debarred from practice; or

(d) a retired officer of the Commercial Tax Department of any State Government or Union territory or of the Board who, during his service under the Government, had worked in a post not below the rank than that of a Group-B Gazetted officer for a period of not less than two years: Provided that such officer shall not be entitled to appear before any proceedings under this Act for a period of one year from the date of his retirement or resignation; or

(e) any person who has been authorized to act as a goods and services tax practitioner on behalf of the concerned registered person.

Therefore, any of the above person can sign the Tax Invoice.  (Reply dt.20/12/2018)