CA Pratik Anand

Nature of Supply and Place of supply are two of the most important concepts under GST.

Determination of Nature of supply is very important to determine whether a supply is inter-state or intra-state.

CGST and SGST will be levied on intra-state supply while inter-state supplies will be charged to IGST.

Also, inter-state and intra-state concept may be important for taking input credit on goods and services.

Determination of Nature of Supply under GST

Ques: How to determine inter-state and intra-state supply?

Ans: The following tables describe how to determine whether a supply is inter-state or intra-state:

Meaning of Inter State Supply under GST

Meaning of Inter State Supply under GST

Therefore, in order to determine whether a supply is intra-state or inter-state we need to determine the location of supplier and the place of supply.

Place of Supply

The provisions relating to Place of supply of services are given under sections 12 & 13 of the IGST Act’2017. The rules for determination of place of supply of services can be categorized into the following two situations:

Place of Supply under GST

Place of supply of services where location of supplier and recipient is in India- Sec 12 of IGST Act’2017

General Rule- Section 12(2) of the IGST Act’ 2017

a) The place of supply of services, except the services specified in sub-sections (3) to (14):

(a) made to a registered person shall be the location of such person;

(b) made to any person other than a registered person shall be,-

(i) the location of the recipient where the address on record exists; and

(ii) the location of the supplier of services in other cases. Other place of supply of services under GST

The above is the general rule for determination of Place of supply of services where location of supplier and recipient is in India.

However, there are specific situations/ nature of services where the location of the supplier and the recipient is in India in which the place of supply is to be determined as per the table given as below:

Nature of Services Place of supply
Services directly in relation to immovable property location at which the immovable property is located or intended to be located
Restaurant, Catering, personal grooming, fitness, beauty treatment, cosmetic and plastic surgery Location where the services are actually performed.
The place of supply of services in relation to training and performance appraisal If provided to:

A registered person, shall be the location of such person;

A person other than a registered person, shall be the location where the services are actually performed.

Services of admission to a cultural, artistic, sporting,scientific, educational, entertainment event or amusement park. Place where the event is actually held or where the park is located.
a) Services of organisation of a cultural, artistic, sporting, scientific, educational or entertainment event.

b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events.

If provided to:

(i) to a registered person, shall be the location of such person;

(ii) to a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.

Supply of services by way of transportation of goods, including by mail or courier If provided to:

a) a registered person, shall be the location of such person;

(b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.

Passenger transportation service If provided to:

(a) a registered person, shall be the location of such person;

(b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey.

Services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle Location of the first scheduled point of departure of that conveyance for the journey.
Banking and other financial services, including stock broking services Location of the recipient of services on the records of the supplier of services.

If the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services.

Insurance services If provided to:

(a) to a registered person, be the location of such person;

(b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.

Advertisement services to CG, SG, a statutory body or local authority meant for the States or Union territories identified in the contract or agreement. Place of supply shall be taken as being in each of such States or Union territories
Telecommunication Services:

a)In case of fixed communication line, leased circuits

b)In case of mobile connection for telecommunication and internet services provided on post-paid basis.

c)In cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means through:

• Through a selling agent or a re-seller or a distributor

• By any person to the final subscriber

• In other cases

Location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services.

Location of billing address of the recipient of services on the record of the supplier of services

Address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply;

Location where such prepayment is received or such vouchers are sold.

Address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services.

Place of supply of services where location of supplier or location of recipient is outside India- Section 13 of the IGST Act

General Rule:

1. The place of supply of services, except the services provided in subsections (3) to (13):

(a) the location of the recipient of services

(b) Where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

Place of supply of services where location of supplier or location of recipient is outside India

However, here also there are specific situations/ nature of services as provided in sub-sections (3) to (13) of Section 13 of the IGST Act’2017 under which the place of supply is to be determined as per the table given as below:

Nature of Services Place of supply
a) services in respect of goods which are required to be made physically available by the recipient of services to the supplier of services.

b)If provided from a remote location by way of electronic means;

i) location where the services are actually performed.

ii) location where goods are situated at the time of supply of services.

 

Services to an individual, who is either recipient of services or a person acting on behalf of the recipient, and which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. location where the services are actually performed
Services directly in relation to an immovable property.

Ex. Services by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, grant of rights to use immovable property, services of architects or interior decorators.

Place where the immovable property is located or intended to be located.

 

Services by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation. Place where the event is actually held.
If services referred to above are supplied at more than one location, including a location in the taxable territory. Location in the taxable territory
If services referred to above are supplied in more than one State or Union territory Each of the respective States or Union territories.

NOTE: the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed

 

• services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;

• Intermediary services;

• Services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.

 

Location of the supplier of services

Supply of services by way of transportation of goods, other than by mail or courier Place of destination of such goods
Passenger transportation services Place where the passenger embarks on the conveyance for a continuous journey
Services provided on board a conveyance during the course of a passenger transport operation first scheduled point of departure of that conveyance for the journey
Online information and database access or retrieval services Location of the recipient of services
Services to be notified to prevent double taxation or non-taxation of supply of services Place of effective use and enjoyment of a service.

(The author is the founder of youronlinefilings.com an online platform for filing income tax returns, company incorporation, accounting/bookkeeping, audits, Fema related compliances etc. He can be contacted at: contact@youronlinefilings.com or capratikanand@gmail.com or Mobile: +91-9953199493)

Author Bio

Qualification: CA in Practice
Company: Pratik & Associates
Location: New Delhi, New Delhi, IN
Member Since: 10 Jun 2017 | Total Posts: 52
Pratik Anand is the founder of youronlinefilings.com, an online startup for business registrations, annual business compliance services, Tax filings, book keeping, legal consultancy etc. He is a Chartered accountant by profession and has special flair and expertise in the area of direct Taxation. H View Full Profile

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