In the earlier article, I had covered Place of Supply of Goods as per IGST Act, 2017 as passed by Lok Sabha on 29th March 2017. This article is about principles to determine the place of supply of services when the location of supplier of service and the location of the recipient of services is in India. Just to reiterate, that the provisions of place of supply of goods and services are given in Chapter V of The IGST Act. There are in all five sections under this chapter. Two sections are to determine place of supply of goods and the remaining three sections determine the place of supply of services. This article is based on section 12 which is titled as “Place of supply of services where the location of supplier of service and the location of the recipient of service is in India”.
Simplification of place of supply of services when location of supplier of service and location of recipient of service is in india
Section 12 provides separate principles for determining place of supply for specified services. If services are other than specified services, then general rule has to be followed. Let’s start with the general rule which is tabulated below:
| Section | Nature | Place of Supply |
| 12(2) | General Rule | Service To Registered Dealer (RD)
Location of such person Services to Unregistered Dealer (URD) Check 1: Address on record Location of recipient Check 2: No address on record Location of supplier of services |
It is important to understand what is :
1. Location of recipient of services, and
2. Location of supplier of services
These terms are defined under section 2(14) and 2(15) respectively of the IGST Act, 2017 which are as follows :
1. Location of recipient of services
“location of the recipient of services” means,-
(a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;
(b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and
(d) in absence of such places, the location of the usual place of residence of the recipient;
2. Location of supplier of services
“location of the supplier of services” means,––
(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and
(d) in absence of such places, the location of the usual place of residence of the supplier;
The term “fixed establishment” is used in the above mentioned definitions. So, it is also important to know the definition of fixed establishment which is defined under section 2(7) which is quoted below :
“fixed establishment” means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services or to receive and use services for its own needs;
The simplification of place of supply of specified services is tabulated below :
| Sl. No. | Section | Nature | Place of Supply | |
| 1. | 12(3) | POS of services relating to:
1. Immovable property 2. Lodging accommodation 3. Accommodation for organizing event 4. Any ancillary services to above |
Check 1 : Property In India
Location at which immovable property is located Check 2 : Property outside India Location of recipient Check 3 : Property located in multiple States and Union territories (UT) Location shall be respective State or UT in proportion to the value of services in terms of agreement. In absence of agreement, POS will on basis as may be prescribed. |
|
| 2. | 12(4) | Place of supply of :
1. Restaurant & catering services 2. Personal grooming 3. Fitness, beauty treatment 4. Health services including cosmetic and plastic surgery |
Location where services are actually performed | |
| 3. | 12(5) | Training & performance appraisal | To RD
Location of RD To URD Location where services are actually performed |
|
| 4. | 12(6) | Admission to events and parks | Place where event is held or park is located | |
| 5. | 12(7) | 1. Organizing event
2. Services ancillary to organization 3. Assigning sponsorship to events |
Check 1 : Event In India
To RD Location of such person To URD Place where event is held Check 2 : Event outside India Location of recipient Check 3 : Property located in more than one States and Union territories Location shall be respective State or UT in proportion to the value of services in terms of agreement. In absence of agreement, POS will on basis as may be prescribed. |
|
| 6. | 12(8) | Transportation of goods including by mail or courier | To RD
Location of such person To URD Location where goods are handed over for transportation |
|
| 7. | 12(9) | Passenger transportation services | To RD
Location of such person To URD Check 1: Point of embarkation is known Place where passenger embarks on conveyance for continuous journey Check 2: Point of embarkation is not known at the time of issue of right to passage POS will be as per general rule |
|
| 8. | 12(10) | Services on board a conveyance | Location of first scheduled point of departure of conveyance | |
| 9(1). | 12(11)(a) | Services by way of :
1. Fixed telecommunication line 2. Leased circuits 3. Internet leased circuits 4. Cable or dish antenna |
Location where it is installed
In case where leased circuit is installed in more than one Sate or UT Location shall be respective State or UT in proportion to the value of services in terms of agreement. In absence of agreement, POS will on basis as may be prescribed. |
|
| 9(2). | 12(11)(b) | Services of :
1. Mobile connection for telecommunication 2. Internet services provided on postpaid basis |
Check 1: Address of recipient is available
Location of billing address of recipient Check 2: Address of recipient is not available POS will be location of supplier |
|
| 9(3). | 12(11)(c) | Services of :
1. Mobile connection for telecommunication 2. Internet services 3. DTH services provided on pre-payment basis : (a) Through selling agent or reseller or distributor of SIM or recharge voucher (b) By any person to the final subscriber |
POS for (a)
Address of agent, reseller or distributor a per record of supplier POS for (b) Location where pre-payment is received or voucher is sold |
|
| 9(4). | Proviso to 12(11) | Pre-paid service availed through electronic mode of payment | Location of recipient of services on record of supplier | |
| 10. | 12(12) | Banking, financial and stock broking service | Check 1: Address available
Location of recipient of service Check 2 : Address not available Location of supplier of service |
|
| 11. | 12(13) | Insurance services | To RD
Location of such person To URD Location of recipient on record of supplier of service |
|
| 12. | 12(14) | Advertisement services to Government meant for identifiable State | Check 1: Contract exits
Location shall be respective State or UT in proportion to the value of services in terms of contract. Check 2: Agreement does not exists In absence of agreement, POS will on basis as may be prescribed. |
|
I will be covering the principles of place of supply of services where the location of the supplier or the location of the recipient is outside India in a separate article.
Good analysis in simple language.