Circular No. CBIC-20001/4/2024-GST issued by the GST Policy Wing of the Government of India, Ministry of Finance, addresses the recent amendments to the Integrated Goods and Services Tax Act, 2017 (IGST Act) concerning the place of supply of goods to unregistered persons. Effective from October 1, 2023, clause (ca) was introduced under Section 10(1) of the IGST Act, establishing specific guidelines for determining the place of supply in such transactions.
Clause (ca) states that for supplies made to unregistered persons, the place of supply shall be determined based on the address recorded in the invoice issued by the supplier. If the invoice does not specify the recipient’s address, then the supplier’s location will dictate the place of supply. The provision includes an explanation clarifying that mentioning the State name of the recipient on the invoice is equivalent to recording the recipient’s address.
The need for this clarification arose due to queries from industry stakeholders, particularly concerning e-commerce transactions where the billing address might differ from the delivery address. The Circular aims to ensure uniformity in the application of these provisions across different tax jurisdictions in India.
In practical terms, if an unregistered person, such as Mr. A from State X, orders a mobile phone via an e-commerce platform and provides a billing address in State X but requests delivery to an address in State Y, the place of supply for GST purposes will be determined by the delivery address (State Y) mentioned on the invoice. This interpretation aligns with the intention to simplify tax compliance for businesses operating in the digital and e-commerce sectors.
The Circular further instructs tax authorities to disseminate this clarification widely through trade notices to ensure stakeholders are informed about the correct application of the law. It also invites feedback and suggestions to address any implementation challenges that may arise.
In conclusion, Circular No. CBIC-20001/4/2024-GST provides clear guidance on the application of clause (ca) of Section 10(1) of the IGST Act, offering certainty to businesses regarding the determination of the place of supply in transactions involving unregistered persons, particularly in the context of e-commerce transactions with varying billing and delivery addresses.
F.No. CBIC-20001/4/2024-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
****
North Block, New Delhi
Dated the 26th June, 2024
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All) The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply of goods to unregistered persons– Reg.
Vide Notification 02/2023-Integrated Tax, dated 29th September, 2023, the provisions of the Integrated Goods and Services Tax (Amendment) Act, 2023 (31 of 2023) came into force with effect from 01.10.2023.
2. Clause (ca) has been inserted in Section 10(1) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the “IGST Act”) with effect from 01.10.2023. The same is reproduced as under:
“(ca) where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.
Explanation. For the purposes of this clause, recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person;”
2.1 The said provision has been inserted as a non-obstante provision overriding the provisions under Section 10(1)(a) or 10(1)(c) of IGST Act. The clause (ca) provides that where the supply of goods is made to an unregistered person, the place of supply would be the location as per the address of the said person recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice. An explanation has also been added to the said clause to clarify that recording the name of the State of the said person shall be deemed to be the recording of the address of the said person.
3. Reference has been received from trade and industry seeking clarification regarding the place of supply in terms of newly added clause (ca) of section 10(1) of the IGST Act, in case of supply of goods made to an unregistered person where billing address is different from the address of delivery of goods, especially in the context of supply being made through e-commerce platforms.
4. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 hereby clarifies the issues as under:
| S.No. | Issue | Clarification |
| Place of supply of goods (particularly being supplied through e-commerce platform) to unregistered persons where billing address is different from the address of delivery of goods. | ||
| 1. | Mr. A (unregistered person) located in X State places an order on an e- commerce platform for supply of a mobile phone, which is to be delivered at an address located in Y State. Mr. A, while placing the order on the e-commerc platform, provides the billing address located in X state. In such a scenario, what would be the place of supply of the said supply of mobile phone, whether the State pertaining to the billing address i.e. State X or the State pertaining to the delivery address i.e. State Y? |
As per the provisions of clause (ca) of sub‑ section (1) of section 10 of IGST Act, where the supply of goods is made to an unregistered person, the place of supply would be the location as per the address of the said person recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice. Further, as per Explanation to the said clause, recording the name of the State of the said unregistered person on the invoice shall be deemed to be the recording of the address of the said person.
Accordingly, it is clarified that in such cases involving supply of goods to an unregistered person, where the address of delivery of goods recorded on the invoice is different from the billing address of the said unregistered person on the invoice, the place of supply of goods in accordance with the provisions of clause (ca) of sub-section (1) of section 10 of IGST Act, shall be the address of delivery of goods recorded on the invoice i.e. State Y in the present case where the delivery address is located. Also, in such cases involving supply of goods to an unregistered person, where the billing address and delivery address are different, the supplier may record the delivery address as the address of the recipient on the invoice for the purpose of determination of place of supply of the said supply of goods. |
person on the invoice shall be deemed to be the recording of the address of the said person.
Accordingly, it is clarified that in such cases involving supply of goods to an unregistered person, where the address of delivery of goods recorded on the invoice is different from the billing address of the said unregistered person on the invoice, the place of supply of goods in accordance with the provisions of clause (ca) of sub-section (1) of section 10 of IGST Act, shall be the address of delivery of goods recorded on the invoice i.e. State Y in the present case where the delivery address is located.
Also, in such cases involving supply of goods to an unregistered person, where the billing address and delivery address are different, the supplier may record the delivery address as the address of the recipient on the invoice for the purpose of determination of place of supply of the said supply of goods.
5. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.
(Sanjay Mangal)
Principal Commissioner (GST)
