In the present case, Nexdigm(SKP) successfully represented its client and convinced the AAR that a LO is simply an extension of the foreign company and, therefore, it should not be required to obtain GST registration in India, as it does not carry out any business activities in India. However, given that there have been contradictory rulings on the matter (such as AAR, Karnataka in Fraunhofer-Gessellschaft), the issue of GST implications on LO persists for the industry at large.
Earlier, the GST law was amended to introduce the National Appellate AAR for giving a final ruling in case of contradictory advance rulings in different states, in case of the same entity. However, the said authority is yet to be constituted.
The government should expedite the constitution of the National Appellate AAR and also look into the possibility of empowering it to grant rulings even in cases where contradictory rulings exist for different entities. This may ensure that more number of taxpayers are eligible to approach it to obtain clarity.