Summary:

The Odisha Authority for Advance Ruling (‘the OAAR’) held that presence of Field Service Engineers (FSEs) and the storage of spare parts at their locations constitutes a place of business and fixed establishment under the GST law. Consequently, the OAAR concluded that the Applicant is making taxable supplies from the State of Odisha and mandatorily required to obtain GST registration in the said State.

Facts:

• The Applicant entered into Annual and Comprehensive Maintenance Contracts (‘AMC/CMC’) with customers in Odisha
• To execute these contracts, the Applicant stationed FSEs in Odisha and dispatched spare parts and toolkits from its Maharashtra warehouse to these FSEs for temporary storage and use in servicing customer equipment
• The FSEs provided repair and maintenance services on behalf of the Applicant, using the stored goods as part of the service process

Issues before the OAAR:

1. Whether the repair and maintenance services provided by the Head Office in Maharashtra through FSEs for AMC/CMC contracts and temporary storage of spare parts & tool kits at FSEs location constitute a “place of business” in Odisha?
2. Whether such location in Odisha would constitute “fixed Establishment”?
3. If the answer to the above questions is ‘No’, whether the Applicant is required to take GST registration in Odisha?

Discussion and Ruling:

• Under Section 2(85)(a) of the CGST Act, a “place of business” includes a warehouse, godown, or any other place where a taxable person stores his goods. The Applicant stationed its FSEs in Odisha and dispatched spare parts and toolkits from Maharashtra to be temporarily stored at the FSEs’ premises for use in maintenance services. Thus, the taxable goods were stored in Odisha
• The Applicant also get covered under clause (c) of Section 2(85), which includes a place where business is conducted through agents or employees. The FSEs, as the Applicant’s employees, provided post-sale repair and maintenance services on its behalf in Odisha
• Consequently, the OAAR held that the combination of storing goods and carrying out business activities through employees constituted a “place of business” in Odisha
• Regarding fixed establishment under Section 2(50), the OAAR observed that the Applicant’s AMC/CMC contracts had fixed durations, and the FSEs’ presence in Odisha lasted for the contract period, meeting the permanence requirement. The FSEs (human resources) were stationed in Odisha with spare parts and toolkits (technical resources) specifically assigned and maintained for service delivery
• Since both criteria of permanence and availability of resources were fulfilled, the Applicant had a “fixed establishment” in Odisha under Section 2(50).
• A taxable person is required to obtain registration in the State from where the taxable supply is made. If a supply is made from a fixed establishment other than the principal place of business, the location of that fixed establishment is deemed as the supplier’s location
• Based on these findings, the Applicant’s fixed establishment in Odisha was deemed to be the location from where maintenance services and related supply of goods (spare parts under AMC/CMC contracts) were provided
• Therefore, the OAAR held that the Applicant is making taxable supplies from Odisha and is required to obtain GST registration in the State.

This ruling emphasized that under the CGST Act, 2017, a taxpayer can be considered to have a “place of business” and “fixed establishment” in a State even without a formal office, if it stationed employees (like FSE) and stored goods (such as spare parts and toolkits) to deliver services. Such an operational setup satisfied the legal definitions making GST registration mandatory in that State. The functional presence through human and technical resources is sufficient to trigger State-wise GST compliance.