Normally we feel that where the work contract is obtained we should get registration to do purchase in the State . If the contractor is got three work contract in three different State, we assume that separate registration in required each and every State. Fact is not the same, we can take registration in one state we originally having the office, in balance of State, we could manage that from there it self .
Suppose, work contractor is registered in Haryana and got another work contract in Orissa, he not to take registration Orissa State. He can execute the work from Haryana.
(a) The dealer in Haryana has to charge CGST & SGST when the goods, purchased by the applicant, are shipped to project site in Orissa, under bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017.
(b) The dealer in Orissa has to charge IGST when the goods, purchased by the applicant, are shipped to project site in Orissa bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017.
What documents would be required bill/ shipped to material purchased in Haryana and shipped at Orissa ,Purchased against CGST / SGST and in case of dealer/supplier is Orissa ship to Orissa and Bill to Haryana against IGST .
Fact of the case was ;
a) Section 22 of the CGST Act 2017 provides requirement for registration according to which every supplier shall be liable to be registered under this Act in the state or union territory, other than special category of states, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.
b) Section 2(71) defines location of supplier and in the instant case location of supplier (applicant) is Haryana , as the supply is made from Haryana. Further Section 2(71) also defines location of supplier of services’ and in the instant case the location of the applicant (works contractor) will be the state where his principal place of business is registered (unless he has established office / establishment in the place where the services are supplied)
c) The place of supply, in case of works contract services, shall be the location at which the immovable property (construction site) is located, as per Section 12(3)(a) of IGST Act 2017.
d) Therefore we understand that we are not required to have any separate GST registration in Orissa which is work contract site.
e) Documents required for proof of principal place of business, as per GST Act are Legal Ownership Document, Consent Letter, Electricity Bill, Municipal Khata Copy, Property Tax Receipt, Rent / Lease agreement & Rent receipt with NOC (in case of expired agreement);
f) Section 10(1) of the IGST Act 2017 determines the place of supply of goods, other than supply of goods imported into, or exported from India, which has two clauses i.e. (a) and (b). We understand that clause (b) is applicable to the instant case and hence CGST & SGST should be charged in case when registration is not required and goods are purchased from Haryana, shipped directly from dealer of Haryana at Orissa. Further if the goods are purchased from Orissa shipped to the site of Orissa then IGST should be charged in terms of Section 10(1)(b) of the IGST Act 2017.
Above case have been decided in AAR ruling of In re M/s T & D Electricals (GST AAR Karnataka) in the case ruling was delivered with opinion that
1) The applicant need not obtain a separate registration in Karnataka, to execute the project in Karnataka. However, they are at liberty to obtain the said registration, if they are able & intend to have a fixed establishment at the project site in Karnataka.
2) (a) The dealer in Rajasthan has to charge CGST & SGST when the goods, purchased by the applicant, are shipped to project site in Karnataka, under bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017.
(b) The dealer in Karnataka has to charge IGST when the goods, purchased by the applicant, are shipped to project site in Karnataka, under bill to ship to transaction in terms of Section 10(1)(b) of the IGST Act 2017.
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About the Author: Author is Sr. Partner of G R A N D M A R K & ASSOCIATES , Chartered Accountants in Gurugram [ Haryana] and Domain Head of GST Department of GMA . He can be reached at email@example.com. WWW. grandmarkca.com