Place of Supply of Goods under GST

Introduction

The Place of supply of Goods is important to decide whether to charge CGST & SGST/UGST or IGST for a particular transaction. If a transaction falls under intra state supply then it attracts CGST & SGST/UGST and if a transaction falls under interstate supply it attracts IGST.

Inter State Supply of Goods

Inter State Supply has been defined under Sec-7 of the IGST act as under

1. Subject to provisions of Section 10, supply of goods, where the location of the supplier and the place of supply are in-

1. Two different states;

2. Two different Union territories: or

3. A state and a Union territory

Shall be treated as supply of goods in course of inter-state trade or commerce.

2. Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated as supply of goods in course of inter-state trade or commerce.

Intra State Supply of Goods

Intra State Supply has been defined under Sec-8 of the IGST act as under

1. Subject to provisions of Section 10, supply of goods where the location of the supplier and the place of supply are in same state or same Union territory shall be treated as intra-state supply:

Provided that the following supply of goods shall not be treated as intra-state supply, namely: –

1. Supply of goods to or by a Special Economic Zone developer or a Special Economic Unit:

2. Goods imported into the territory of India till they cross the customs frontier of India;

3. Supplies made to a tourist referred to in section 15.

Section 10

Place of supply of Goods other than supply of goods imported into, or exported from India, shall be as under.

1. Where the supply involves movement of the goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of the goods terminates for delivery to the recipient.

2. Where the goods are delivered by the supplier to a recipient or any other person on the direction of the third person, whether acting as an agent or otherwise, before or during the movement of the goods, either by way of transfer of document of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person.

• This clause covers the Bill-to- Ship-to & sale in transit transactions, and place of supply of goods are deemed to be principal place of business of the person who purchases and asks to deliver to another person irrespective of the actual delivery of goods.

3. Where the supply of goods does not involve movement of the goods, whether by the supplier or the recipient, the place of supply shall be location of the goods at the time of delivery to the recipient.

• Ex-factory sales or Over the counter sale etc. For example, person from Pune comes to Hyderabad and buys some medicines in the shop located in Hyderabad and carries the same to Pune. Supplier is not bothered about where the recipient is carrying the goods,

4. Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly.

• A Ltd registered in Andhra Pradesh purchases 10 computers to be installed in its new office in Chennai from a supplier in Andhra Pradesh. In this case the place of supplier is Andhra Pradesh but the place of supply of goods will be Chennai, Tamilnadu. Hence IGST is levied.

5. Where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board.

• C is traveling in an aircraft from Delhi to Hyderabad. He purchases food from the crew. These food items were on-boarded from Delhi. Placeof supply, in this case, will be Delhi.