Lalit JR Sharma

Lalit JR Sharma

1.0. Introduction

The importance of place of supply is to determine (i) Nature of Supply (ii) Type of Tax to be levied and (iii) Tax Collecting Jurisdiction Authority.  Under the present indirect tax system, both Central and State Government levy the taxes goods. Further Central Government has exclusive authority to levy tax on services. We should consider following aspects about taxable event, taxes levied, relevant jurisdiction authority and relevancy of place:

Taxable Event Type of Tax Levied Relevant Jurisdiction Authority  Relevancy of Place
Manufacture / Production of Goods  except

a) Alcoholic liquors  of human consumption

b) Opium, Indian Hemp and other Narcotic drugs.

Excise Duty Central Government vide Entry No. 84 of Union List. There is no relevancy of place, as wherever in India, goods are manufactured or produced, Excise duty is levied.
Inter State Sales / Purchase of Goods Central Sales Tax Central Government vide Entry No. 92A of Union List. Central Sale Tax is levied only when sales or purchase takes place in the course of inter- state trade or commerce. Hence in order to levy CST, goods must be moved from one state to another.
Import and Export of Goods Custom Duty Central Government vide Entry No. 83 of Union List. Custom Duty is levied when either import of goods from outside India or export from India.
Intra Trade Sales or Purchase VAT State Government vide Entry No. 54 of State List VAT is levied when intra state sale or purchase of goods takes place.
Provision of Service Service Tax Central Sales Tax vide Entry No. 97 of Union List Service Tax is levied on provision of service at any place in India.

Hence place supply of goods is important to levy central sale tax or VAT. Central sale tax is levied when there is a movement of   goods from one state to another, whereas VAT is levied only when there is intra state movement of goods.

Further, under the present system of indirect tax system, Levy of CST and VAT is origin based. Origin Based taxation system means the tax would accrue to the taxing authority having the jurisdiction over the place of origin i.e. from where the movement of goods takes place.

1.2. Place of Supply of Goods under the GST

As we discussed earlier, place of supply is important to determine the tax to be levied and relevant jurisdiction authority. Under the GST Act, applicability of relevant taxes i.e. Central Goods and Service Tax (CGST); State Goods and Service (SGST) or Interstate Goods and Service Tax (IGST) would depend on whether supply of goods or service takes place intra state or inter- state. Hence at first place, it is important to understand the meaning of place of supply.

According to Section 2(86) of CGST Act: “Place of supply” means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act”

Hence we have to read the meaning of Place of supply according to Chapter V of IGST along with chapter IV (Nature of Supply) with combined reading of Section 7 (Taxable Event) and Section 12 (Point of Taxation), Section 31 (Issue of Invoice)

1.3 Before proceeds, we should consider the nature of supply:

1. Inter State Supply:

Subject to the provisions of section 10, supply of goods,

            Where the location of the supplier

And

The place of supply is in––

(a) Two different States;

(b) Two different Union territories; or

(c) A State and a Union territory, shall be treated as a supply of goods in the course of inter-State trade or commerce {Section 7(1) of IGST Act}

Hence location of supplier of goods and place of supply is important to determine the nature of supply. The GST Law has not defined the meaning of location of supplier, whereas location of supply will be determined in accordance to Section 10(1) of IGST Act.  Hence location of supplier has to determine on situation to situation basis.  With the help of following examples, we try to explain the location of supplier and location of supply:

(i) A in Delhi placed an order on a manufacturer of Haryana to produce the goods and sell on ex- factory basis with instruction to retain it till further instruction. In this case location of supplier is Haryana and also location of supply is also in Haryana. Therefore, the manufacturer is required to charge CGST-SGST because these goods do not involve any movement and after lapse of time the delivery is deemed to be complete in Haryana itself.

(ii) A in Delhi placed an order on a manufacturer of Haryana to produce the goods and sell on ex- factory basis with instruction to retain it till further instruction. After lapse of certain time, instructions are received to dispatch the goods to a warehouse in Madhya Pradesh. In this case, two suppliers and two place of supplies are involved:

> From Manufacturer to A, In this case In this case location of supplier is Haryana and also location of supply is also in Haryana. Therefore, the manufacturer is required to charge CGST-SGST because these goods do not involve any movement and after lapse of time the delivery is deemed to be complete in Haryana itself.

> From Mr. A to Warehouse: The location of the registered place of business cannot be guiding the nature of supply to such an extent that transactions that ought to be taxed when the goods somehow escape the incidence. The point where goods are situated more accurately represents the location of supplier. The location of supplier is therefore the physical point where the goods are situated under the control of the person wherever incorporated or registered, ready to be supplied. This interpretation augurs well with the concept of casual taxable person. The company in Delhi that collects delivery of the goods in Haryana and supplies them from Haryana to Madhya Pradesh must be regarded as casual taxable person in Haryana liable to pay IGST on this supply.

Section 7 can be correctly interpreted only by identifying the location of supplier of goods based on the physical point where the goods are situated.

2. Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce. {Section 7(2) of IGST Act}

3. Supply of goods shall be treated as inter- state supply in following cases:

a. When supplier is located in India and place of supply is outside India: i.e. Export of Goods

b. To or by a special economic zone developer or a special economic zone units:

c. In the taxable territory, not being an intra –supply and not covered elsewhere in this section i.e. supply from non –taxable territory to a taxable territory.  {Section 7(5) of IGST Act}

4. Intra State Supply:

Subject to the provisions of section 10, supply of goods—-

Where the location of the supplier

    And

The place of supply of goods is in the same State or same Union territory shall be treated as intra-State supply: {Section 8(1) of IGST Act}

With the help of following example; meaning of intra- supply should be understood:

(a) A Limited incorporated in Uttar Pradesh having purchased certain goods in Odisha from Mr. B and supplying the same to the customer also in Odisha. In this case,  there are two separate transactions of supply:

> First From Mr. B to A Limited-In this case, movement of goods were started and terminated in same state. Hence registered office of A Limited is not relevant.

> First From A Limited to Customer: In this case, movement of goods were started and terminated in same state. Hence registered office of A Limited is not relevant. A Limited  in Uttar Pradesh will be a casual taxable person in Odisha as regards the outward supply made.

Therefore, it is important to bear in mind that the place of incorporation of the supplier in any transaction is not relevant as the location of the supplier which has been explained earlier as – physical point where the goods are situated under the control of the person wherever incorporated or registered, ready to be supplied

Meaning of Causal Person:

Casual taxable person” means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business {Section 2(20) of CGST Act}

4. Supply of goods in the following cases shall not be treated as intra- state supply:

a) Supply of goods to or by a special economic zone developers or special economic zone unit.

b) Goods imported into the territory of India till they cross the custom frontiers

c) Supplies made to a tourist referred to in Section 15 of IGST Act.   {Proviso to Section 8 (1) of IGST Act)

{Explanation II to Section 8 of IGST Act}

Further it is important to note that GST is destination based taxation system instead of origin based consumption. Destination based consumption means tax would be accrue to the Tax Authority having jurisdiction over the place of consumption.

Overriding Provisions: Section 9 of IGST Act

Notwithstanding anything contained in this Act,––

(a) where the location of the supplier is in the territorial waters, the location of such supplier; shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located. or

(b) Where the place of supply is in the territorial waters, the place of supply, shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

1.4. Where movement of goods involved and Supplies in India.

Situation I:

Where the supply involves movement of 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 goods terminates for delivery to the recipient {Section 10(1)(a) of IGST Act}

Based on above provisions, it is clear that place of supply would be location of goods where movement of goods terminated. Movement ‘terminates for delivery’ requires a brief understanding about the manner of concluding delivery. Delivery – the mode and the time – is the unilateral choice of the recipient and the supplier has no authority to decide ‘how’ and ‘when’ he will deliver the goods to the recipient. Delivery of goods would be completed only when it is in accordance the way stated by the recipient. If there is deviation from the instruction, then it should not be termed as terminated

Taxable Event
Point of Taxation
Place of Supply
Issue of Invoice
Nature of Supply
Type of Taxes to be levied
Supply of Goods {Section 7(1)(a)}
The date of Issue of Invoice by the Supplier (Assuming advance payment has not been received) {Section 12(2)(a) of CGST Act}
Where the movement of goods terminate for delivery to the Recipient
{Section 10(1)(a) of IGST Act}
Issue of Invoice shall be on or before the Removal of Goods.
{Section 31(1)(a)}
Inter State Supply according to Section 7(1) of IGST Act
Inter – State Goods and Service Tax
1. Movement By Supplier
Mr. A of Delhi and Mr. B of Uttar Pradesh (Delivery place Mathura) enters into a contract in which Mr. A sale the goods to Mr. B on 10th May 2017 and issue an invoice on 11th May 2017. He removes the goods on 11th May 2017 and dispatches the same. The goods pass through various states i.e. From Delhi to Faridabad (Haryana) to Mathura (Uttar Pradesh) where the movement terminated.
Here Mr. A is supplier  who undertake the responsibility of movement of goods and Mr. B is recipient
Based on above Example: sequence of above is as follow:
Taxable Event :
Date of Sales of Goods i.e. 10th May 2017
Point of Taxation:
Date of Issuance of Invoice i.e. 11th May 2017 (Assuming advance payment has not been received) {Section 12(2)(a)}
Place of Supply:
Mathura- Uttar Pradesh where movement of Goods terminated.
{Section 10(1)(a) of IGST Act}
Issue of Invoice:
 11th May 2017  i.e. on the removal of goods according to Provision of Section 31(1)(a)
Nature of Supply
Inter State Supply according to Section 7(1) of IGST Act
Tax to be levied
Inter – State Goods and Service Tax
 
2. Movement from the Branch Office of Supplier.
Mr. A in Delhi sold the goods to Mr. B in Delhi on 4th April 2017. However goods were moved from the Branch office Mr. A which was situated in Haryana on 5th April 2017 under the Issuance of Invoice.  Movement of goods terminated in Delhi on 6th of April 2017.
Branch office of Mr. A undertook the responsibility for the movement of goods.  It is important to note that branch office of Mr. A shall be considered as distinct person within the meaning of Section 25(4).
Here branch office of A is supplier and B is the recipient and the sequences of events are as follows:
Taxable Event: Sales of Goods on 4th April 2017
Point of Taxation: Date of Issuance of Invoice on 5th April 2017 (Assuming advance payment has not been received) {Section 12(2)(a)}
Place of Supply
Delhi where movement terminated
{Section 10(1)(a) of IGST Act}
Issue of Invoice:
 5th April 2017  i.e. on the removal of goods according to Provision of Section 31(1)(a)
Nature of Supply
Inter- state supply as movement of goods start in one state and terminated in another state
Tax to be Levied
Inter- state goods and service tax
 
 
 
 
 
 
3. Movement from the Agent’s Office of Supplier.
Mr. A in Delhi sold the goods to Mr. B in Uttar Pradesh on 4th April 2017. However goods were moved from the Agent’s office of Mr. A which was situated in Uttar Pradesh on 5th April 2017 under the issuance of invoice.  Movement of goods started and terminated in Uttar Pradesh on 6th of April 2017.
Agent of Mr. A undertook the responsibility for the movement of goods.  Here Agent of Mr. A is supplier and Mr. B is  recipient and the sequences of events are as follows:
Taxable Event: Sales of Goods on 4th April 2017
Point of Taxation: Date of Issuance of Invoice on 5th April 2017 (Assuming advance payment has not been received)
{Section 12(2)(a)}
Place of Supply
Uttar Pradesh where movement terminated
{Section 10(1)(a) of IGST Act}
Issue of Invoice:
 5th April 2017  i.e. on the removal of goods according to Provision of Section 31(1)(a)
Nature of Supply
Intra- state supply (Note
Tax to be Levied
Central Goods and Service Tax (CGST)and  State Goods and Service Tax (SGST)
 
 
 
 
 
 
4. Movement at the Instruction of Recipient
Mr. A in Delhi sold the goods to Mr. B in Uttar Pradesh on 4th April 2017 under the issuance of invoice.  Mr. A removed the goods on 5th April 2017 and handed over the goods to agent of Mr. B who moved the goods from Delhi to Uttar Pradesh and movement of goods terminated on 5th April 2017
Here Mr. A is supplier and Mr. B is  recipient and the sequences of events are as follows:
Taxable Event
Sale of Goods on 4th April 2017
Point of Taxation:
Date of Issuance of Invoice on 4th April 2017 (Assuming advance payment has not been received) {Section 12(2)(a)}
Place of Supply
Uttar Pradesh where the movement terminated
{Section 10(1)(a) of IGST Act}
Issue of Invoice
4th April 2017 i.e. before the removal of goods according to Provisions of Section 31(1)(a)
Nature of Supply
Inter- state supply as movement of goods start in state and terminated in other state
Tax to be Levied
Inter-state Goods and Service Tax (IGST)
 
 
 
 
 
 

Situation II

Where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents 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 {Section 10(1)(b) of IGST Act}

In this case, there are two supplies:

a) From original supplier to third party (Actual buyer for original supplier)

b) From third party to recipient (Actual buyer for third party)

Section 10(1)(b)  deals only with the situation specified in point a i.e. from original supplier to third party.   Further we should construct the meaning of Recipient for aforesaid provisions. According to Section 2(93) of CGST Act, Recipient of goods means

a. Where a consideration is payable for the supply of goods, the person who is liable to pay that consideration;

b. Where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available;

Here the recipient is the person who actually collects the goods but no consideration is payable to original supplier.

 Following are the example for above provisions:

1. Mr. A of Delhi sold the goods to Mr. B of Haryana on 5thApril 2017.  However Mr. B sold the goods to Mr. C of Delhi on 7th April 2017 by transfer the document of title and instructed Mr. A to deliver the goods to Mr. C having the place of business in Delhi.

Here——– supplier is—————————————– Mr. A

Recipient is ————————————— Mr. C (Recipient for Mr. A)

Third Person is———————————— Mr. B(Actual Buyer for Mr. A)

In this, there are two supplies involved:

a) From Mr. A (supplier) to Mr. B (Third person)

b) From Mr. B(third person) to Mr. C (recipient)

For Point (a)—–  From Mr. A to Mr. B

Taxable Event Point of Taxation:

 

Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply

 

Tax to be Levied

 

Sale of Goods on 5th April 2017 Date of Issuance of Invoice on 5th April 2017 (Assuming advance payment has not been received) {Section 12(2)(a)} Delhi. Haryana Haryana 5th April 2017 i.e. on the removal of goods according to Provisions of Section 31(1)(a) Inter- state supply because location of supplier is Delhi and principal place of Mr. B is Haryana Inter-state Goods and Service Tax (IGST)

For Point (b)—–  From Mr. B to Mr. C

Taxable Event Point of Taxation: Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 7th April 2017 Date of Issuance of Invoice on 7th April 2017 (Assuming advance payment has not been received) {Section 12(2)(a)} Delhi. Haryana Delhi 7th April 2017 i.e. before the delivery in accordance to Provisions of Section 31(1)(b) Inter- state supply because location of recipient is Delhi and principal place of Mr. B is Haryana Inter-state Goods and Service Tax (IGST)

2. Mr. A of Delhi sold the goods to Mr. B of Delhi on 5thApril 2017.  However Mr. B sold the goods to Mr. C of Hisar, Haryana on 7th April 2017 by transfer the document of title and instructed Mr. A to deliver the goods to Mr. C .

Here——– supplier is—————————————– Mr. A

Recipient is ————————————— Mr. C (Recipient for Mr. A)

Third Person is———————————— Mr. B(Actual Buyer for Mr. A)

In this, there are two supplies involved:

c) From Mr. A (supplier) to Mr. B (Third person)

d) From Mr. B(third person) to Mr. C (recipient)

For Point (a)—–  From Mr. A to Mr. B

Taxable Event Point of Taxation: Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 5th April 2017 Date of Issuance of Invoice on 5th April 2017 (Assuming advance payment has not been received)  {Section 12(2)(a)} Haryana Delhi Delhi 5th April 2017 i.e. on the removal of goods according to Provisions of Section 31(1)(a) Intra State Supply in accordance to Section 8(1). CGST and SGST to be paid by Mr. A

 For Point (b)—–  From Mr. B to Mr. C

Taxable Event Point of Taxation: Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 7th April 2017 Date of Issuance of Invoice on 7th April 2017 (Assuming advance payment has not been received){Section 12(2)(a)} Haryana Delhi Haryana 7th April 2017i.e. before the delivery in accordance to Provisions of Section 31(1)(b) Inter – State Supply Inter-state Goods and Service Tax (IGST)

3. Mr. A of Delhi sold the goods to Mr. B of Uttar Pradesh on 5thApril 2017.  However Mr. B sold the goods to Mr. C of Hisar, Haryana on 7th April 2017 by transfer the document of title and instructed Mr. A to deliver the goods to Mr. C .

Here——– supplier is—————————————– Mr. A

Recipient is ————————————— Mr. C (Recipient for Mr. A)

Third Person is———————————— Mr. B(Actual Buyer for Mr. A)

In this, there are two supplies involved:

e) From Mr. A (supplier) to Mr. B (Third person)

f) From Mr. B(third person) to Mr. C (recipient)

For Point (a)—–  From Mr. A to Mr. B

Taxable Event Point of Taxation: Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 5th April 2017 Date of Issuance of Invoice on 5th April 2017 (Assuming advance payment has not been received){Section 12(2)(a)} Haryana Uttar Pradesh Uttar Pradesh 5th April 2017 i.e. on the removal of goods according to Provisions of Section 31(1)(a) Inter State Supply IGST

 For Point (b)—–  From Mr. B to Mr. C

Taxable Event Point of Taxation: Place of Delivery i.e. Place of Recipient Principal Place of Business of Third Person Place of Supply Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 7th April 2017 Date of Issuance of Invoice on 7th April 2017 (Assuming advance payment has not been received){Section 12(2)(a)} Haryana Uttar Pradesh Haryana 7th April 2017 i.e. before the delivery in accordance to Provisions of Section 31(1)(b) Inter – State Supply Inter-state Goods and Service Tax (IGST)

 It must be noted that movement of goods is essential under the Section 10(1)(a) and Section 10(1)(b).  Movement of goods is started when goods are removed and handed over to transporter.  

However the second limb of Section 10(1)(b) i.e. From the Third Person to Recipient doesn’t involve the movement by the third person or any person for or on behalf of third person. For the second limb of Section 10(1)(b) location of recipient where the movement of good terminated by the first supplier i.e. original supplier.

Here it is important to note, property in goods is transferred only when recipient takes the delivery in goods and risk and reward are transferred from the seller to buyer. Under the normal trade practice, following are types of supply contract:

a) When supplier is responsible to deliver the goods at the recipient,

In this case property in goods is transferred only when goods actually handed over to buyer or his agent nominated by him. Here the supply involves the movement of goods by the supplier, and place of supply shall be the location where movement of goods terminates.  Supplier shall issue an invoice before or at the time of removal in accordance to Section 31(1)(a) and type of tax to be levied depends on the place where the movements terminates. if movement of goods starts in one state and terminates in other state, supplier shall levy IGST, whereas movement starts and terminates in same state, then supplier shall levy CGST and SGST.

b) Where supplier does not responsible to deliver the goods and recipient himself moves the goods at his end,

In this case property in goods is transferred, once the supplier handed over the goods to recipient. Here the supply involves the movement of goods by the recipient, and place of supply shall be the location where movement of goods terminates. Supplier shall issue an invoice before or at the time of removal in accordance to Section 31(1)(a) and type of tax to be levied depends on the place where the movements terminates. if movement of goods starts in one state and terminates in other state, supplier shall levy IGST, whereas movement starts and terminates in same state, then supplier shall levy CGST and SGST.

c) Where Supplier undertakes the responsibility to deliver the goods on recipient’s request, in this case property in goods is transferred, once the supplier handed over the goods to recipient.

Where the Movement of Goods not involved

Situation: III

Where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; {Section 10(1)(c) of IGST Act}

Section 10(1)(c) covers the situation where the supply doesn’t not require the movement of goods and delivery to recipient will stand complete.  Once the recipient accepts the delivery of goods at the location of supplier and he himself doesn’t undertake movement of goods to any other place for ultimate use of those goods. In that case place of supply shall be the location of delivery to the recipient.  With the help of following examples, let’s try to understand aforesaid provisions with the help of following examples:

1. Suppose, on 5thJuly 2017, Rishi comes from Punjab to Delhi for work and go in a showroom of Reliance Tread to purchase apparels. Rishi selects few garments and takes these garments on cash counter. On cash counter, Representative makes the bill by mentioning the cash sale in buyer column. Rishi takes the delivery from the showroom and return back to Punjab on the same day.

In this case once the recipient undertakes the delivery of garments without mentioning his location, in this case it shall be assumed that movement of goods has been terminated without movement.

Taxable Event Point of Taxation: Place of Supply i.e. Location of goods  at the time of delivery to the recipient Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 5th July 2017 Date of Issuance of Invoice on 5th July 2017 {Section 12(2)(a)} Delhi 5th July 2017 i.e. on the delivery in accordance to Provisions of Section 31(1)(b) Intra –state supply CGST and SGST

2. Rishi of Delhi requested a job worker of Hisar, Haryana to make certain moulds on 5thApril 2017. Job worker made the moulds and requested to take the delivery. Rishi requested him to keep the moulds with him. Hence Job worker issue an invoice on 10th May 2017.

Taxable Event Point of Taxation: Place of Supply i.e. Location of goods  at the time of delivery to the recipient Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 10th May 2017 Date of Issuance of Invoice on 10th May 2017 {Section 12(2)(a)} Haryana 10th May 2017 i.e. on the delivery in accordance to Provisions of Section 31(1)(b) Intra –state supply CGST and SGST at Haryana

Hence if any inter-state supplier purchases the goods in another state, then for taking input tax credit, he has to mention the address of his location and movement of goods must be necessary even recipient himself undertake the movement of goods.

If goods are not moved then he has to register himself as casual dealer and then supply the goods to another location. He has to adopt valuation rule.

Situation IV

Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly.  {Section 10(1)(d) of IGST Act}

In order to understand aforesaid provisions, we should consider the situation where there is necessity to assemble or installation. According to Section 2 (30) of CGST Act— “Composite Supply” means —— a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

For example: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

Further in accordance to Section 2(119) of CSGT Act “Works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

Hence Section 10(1)(d) of IGST Act covers a situation of composite supply where installation or assembly is incidental part of principal supply of goods.  Supplier undertakes the installation activity as a part and parcel of supply of goods.

Further Section 10(1)(d) of IGST Act doesn’t cover the situation of work contract (work contract is considered as supply of service).

With the help of under mentioned provisions, let’s find out the place of supply in case of installation or assembly of goods at the site:

1. Rishi Limited of Delhi receives an order from X Limited of Punjab for the supply of Weigh Bridge in Punjab on 10thJuly 2017.  Rishi Limited removes the parts of Weigh Bridge on 15th July 2017 under issuance of invoice and installed at site in Punjab on 27th July 2017.

Taxable Event Point of Taxation: Place of Supply i.e.  Location of site Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 10th July s2017 Date of Issuance of Invoice on 15th July 2017 {Section 12(2)(a)} Punjab 15th July 2017 i.e.  before the removal  in accordance to Provisions of Section 31(1)(a) Inter State Supply in accordance to Section 7(1) of IGST Act IGST (tax rate would be which is applicable on Principal supply of goods)

2. Rishi Limited of Delhi receives an order from X Limited of Punjab for the supply of server to be installed in Himachal Pradesh on 10thJuly 2017.  Rishi Limited removes the server on 15th July 2017 under issuance of invoice and installed at site in Himachal Pradesh on 27th July 2017.

Taxable Event Point of Taxation: Place of Supply i.e.  Location of site Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 10th July 2017 Date of Issuance of Invoice on 15th July 2017  {Section 12(2)(a)} Himachal Pradesh 15th July 2017 i.e.  before the removal  in accordance to Provisions of Section 31(1)(a) Inter State Supply in accordance to Section 7(1) of IGST Act IGST (tax rate would be which is applicable on Principal supply of goods)

Situation V

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 {Section 10(1)(e) of IGST Act}

The provision deals a situation where goods are supplied in train, bus or vessel, such as food supplies in Air India or Indian Railway.  By analyzing the provision, there are two supplies:

a) Supply of goods to Operator

b) From Operator to Passengers.

Section 10(1)(e) deals only second situation. The first limb should be guided in accordance to provisions of Section 10(1)(a) or Section 10(1)(c)  of IGST Act.

With the help of following example, lets’ understand the provision:

Mr. A of Delhi Supply meals to Indian railway on 10th July 2017 and remove the goods under the invoice. Such goods are loaded on Rail at Ghaziabad-Uttar Pradesh on 15th July 2017, where passengers are also board in Ghaziabad- Uttar Pradesh on the same day (assuming meals supplied on same day to concerned persons).

Here two supplied are involved

a) From Mr. A to Indian Railway (Mr. A is supplier and Indian Railway is recipient)

b) From Indian Railway to Passengers (Indian Railway is supplier and Passengers are recipient)

From Mr. A to Indian Railway

Taxable Event Point of Taxation: Place of Supply i.e.  Where movement terminated Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 10th July 2017 Date of Issuance of Invoice on 10th July 2017 {Section 12(2)(a)} Ghaziabad – Uttar Pradesh 10th July 2017 i.e.  before the removal  in accordance to Provisions of Section 31(1)(a) Inter State Supply in accordance to Section 7(1) of IGST Act IGST

From Indian Railway to Passenger

Taxable Event Point of Taxation: Place of Supply i.e.  where goods are board Location of Supplier i.e. operator Issue of Invoice Nature of Supply Tax to be Levied
Sale of Goods on 15th July 2017 Date of Issuance of Invoice on 15th July 2017 {Section 12(2)(a)} Ghaziabad – Uttar Pradesh Ghaziabad –Uttar Pradesh 15th July 2017 i.e.  on the removal  in accordance to Provisions of Section 31(1)(a) Intra – State Supply CGST and SGST

2.0. Place of Supply of Goods in Case of Import

a) Meaning of Import

‘Import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India. {Section 2(10) of IGST Act}

b) “India” means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976, and the air space above its territory and territorial waters.  {Section 2(56) of CGST Act}

c) Nature of Imported Goods

Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce. {Section 7(2) of IGST Act}

d) Customs Frontiers of India means “the limits of a customs area as defined in section 2 of the Customs Act, 1962.

e) According to Section 2(11) of the Customs Act 1962, Custom Area means the area of a custom station and includes any area in which the imported goods or exported goods are ordinarily kept before clearance by Customs Authorities;   

f) Section 2(10) of IGST Act specifically uses the word “Bringing” which means there must be a specific legal purpose and excluding the situations where goods naturally or involuntary relocate into India from a place outside India. Further there must be physical movement of goods into India from a place outside India by the active efforts on the part of any person.

g) It is important to note that payment in convertible foreign exchange is not at all a criterion for determining whether it is import in respect of goods

h) Place of Supply: The place of supply of imported goods shall be the location of supplier. {Section 11(a) of IGST Act}

2.1. Type of Import of Goods

a) Import of goods and relocate the goods outside India territory {High Sea Sales outside Indian Territory}

b) Import of goods and cross custom frontiers

c) High Sales in Indian Territory

d) Reimport of Exported Goods into India

2.2. Type of Duty Imposed & Valuation

Sub section (7) and (8) of Section 3 of Custom Tariff Act has been amended by Taxman Law (Amendment) 2017 to require the imposition of IGST on all the goods imported into India. Section 3 provides that :

a) Sub Section 7: Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent. as is leviable under section 5 of Integrated Goods and Services Tax Act, 2017on a like article on its supply in India, on the value of the imported article as determined under sub-section (8)

b) Sub Section 8: For the purposes of calculating the integrated tax under sub-section (7) on any imported article where such tax is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962, be the aggregate of— (a) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include the tax referred to in sub-section (7) or the cess referred to in sub-section (9)

To understand above, following examples should be considered:

For Point (a) of 2.1.—— Import of Goods and relocate the goods outside India

1. Rishi Limited of U.S.A. supplied the goods to its sister concern Rishu Limited of  Delhi. However goods were supplied to Myanmar. The movement of goods commenced from outside India and concluded outside India. Hence such transaction is outside the preview of Section 7(2) of IGST Act because these goods didn’t bring into Indian’s territory.

Taxable Event Location of Supplier Location of Goods before supply Goods Supplied to Location of Recipient Nature of Supply Tax to be Levied
No USA USA Myanmar Myanmar No Taxable Nil

2. Rishi Limited of U.S.A supplies the goods to a customer Mehal Limited incorporated in India.  However before goods are bought into Indian Territory, Mehal Limited sales the goods to Praveen Limited of Sri Lanka in high seas. Hence such transaction is outside the preview because goods are not ‘brought’ into India but sold in high seas.

In order for every supply to come within the operation of subsection 2 to section 7 it requires that the resultant effect of the supply must cause the goods to enter the territory of India. This Act does not enjoy extraterritorial jurisdiction and is limited to imposing tax if the goods are imported into the territory of India

For Point (b) of 2.1.—– Import of Goods into India and cross the custom frontier

1. Karuna Limited of Delhi purchased the goods from A Limited of USA on 5thJuly 2017. A Limited supplied the goods and goods landed into India on 25th July 2017.  Such transaction would be treated as Inter- State Sales before they cross the custom frontiers.

Let’s suppose value of such goods are Rs. 480000($40000* Rs.60 /$). Custom duty  is 12%. and IGST  is 18%.

Particulars Amount (Rs)
Transaction Value 480000.00
Custom Duty @ 12% 57600.00
Sub Total 537600.00
Add:
IGST @ 18% 96768.00
Grand Total 634368.00
 

For Point (c) of 2.1 —–High Sea Sales: goods sold by original importer to another

1. Let suppose Lalit Limited of Delhi imported the goods from USA amounting to $ 100000/-. During the movement of goods in Indian Territory but before crossing the custom frontier, Lalit Limited sold the goods to Preyanshi Limited of Faridabad- Haryana for $105000 when exchange rate was $1 = Rs. 65 on 1stJuly 2017. Preyanshi Limited filed the Bill of Entry on 7th July 2017 when custom exchange rate was $1= Rs 64. IGST Rate is 10%.

In above example, supply from Lalit Limited to Preyanshi Limited is concluded on1st July 2017.

The resultant supply from USA would cause the goods to enter into India, however Lalit Limited (Original Importer) sold the goods Preyanshi Limited who filed the bill of entry.  Following treatment would be applied:

From Lalit Limited to Preyanshi Limited

Taxable Event Point of Taxation: Place of Supply Location of Supplier i.e. Issue of Invoice Nature of Supply Tax to be Levied
Supply in the form of Sales: {Section 7(1)(a)(i)} Date of Issuance of Invoice: 1st July 2017 Faridabad- Haryana Delhi Making available of goods to recipient i.e. Section 31(1)(b) Inter State Supply in accordance to Section 7(2) of IGST Act IGST
Particulars  Amount Amount
Sales Price $105000.00 Rs. 6825000.00
IGST   @ 10% Rs.   682500.00
Total Sales Price  Rs. 7507500.00

Preyanshi Limited shall file the Bill of Entry, suppose custom duty is 12%.

Particulars Amount Amount
Assessable Value  $             100,000.00 ₹ 6,400,000.00
Add:
Custom Duty @ 12% ₹ 768,000.00
₹ 7,168,000.00
Add:
IGST @ 10% ₹ 716,800.00
₹ 7,884,800.00

3.0. Place of Supply:  Export of Goods

1. Meaning of Export of Goods:

With its grammatical variations and cognate expressions, means taking goods out of India to a place outside India;

{Section 2(5) of IGST Act}

2. Nature of Supply:

When the supplier is located in India and the place of supply is outside India shall be treated as Inter – State Trade or Commerce 

{Section 7(5) (a) of IGST}.

3. Place of Supply

The place of supply in case of goods exported from India shall be the location outside India

{Section 11(b) of IGST Act}

4. Type of Tax to be levied

Section 2(23) {Meaning of  Zero Rated Goods}  read with Section 16 (1)(a)  of IGST Act provides  that   Export of Goods shall be considered as zero rated goods  and no tax shall be levied on such goods.  Zero rated supply implies that the recipient of goods is not liable to pay the tax. It doesn’t mean that the tariff rate of such goods is Zero.

4.0. Place of Supply: to or by Special Economic Zone Developer or Unit

1. Meaning of Special Economic Zone:shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005;

2. Meaning of Special Economic  Zone Developers: shall have the same meaning as assigned to it in clause (g) of section 2 of the Special Economic Zones Act, 2005 and includes an Authority as defined in clause (d) and a Co-Developer as defined in clause (f) of section 2 of the said Act;.

2. Nature of Supply: {Section 7(5)(b)}

Situation I: Supply From anyplace in India to Special Economic Zone: Inter State Supply

Situation II: Supply to anyplace in India from Special Economic Zone:  Inter State Supply

Situation III: Supply from Special Economic Zone to Special Economic Zone: Inter- State Supply

Further Proviso to Section 8(1) of IGST Act {Intra State Supply} provides that where the location of special economic zone and location of supplier are in same state, still such supply shall be considered as Inter – State Supply.

3. Place of Supply

Place of supply shall be the location of Special Economic Zone.

4. Type of Tax to be Levied

Section 2(23) {Meaning of  Zero Rated Goods}  read with Section 16 (1)(b)of IGST Act provides  that   Export of Goods shall be considered as zero rated goods  and no tax shall be levied on such goods.  Zero rated supply implies that the recipient of goods is not liable to pay the tax. It doesn’t mean that the tariff rate of such goods is Zero.

For better understanding of provisions of supply of export and supply from /to SEZ, following examples should be considered:

1. A Limited in Delhi sold the goods to B Limited of Sri Lanka on 5thJuly 2017.  A Limited removed the goods on 6th July 2017. A Limited filed the shipping bill on 8th July 2017 and custom authority issued the Let Export order on 10th July 2017.

In this case:

a) Taxable Event   :  Section 7(1)(a) : Supply in the form of Sales of Goods

b) Location of  Supplier :  Delhi

c) Location of Recipient :  Sri Lanka

d) Time of Supply :  Filing of Shipping Bill i.e. 8thJuly 2017 (Note 2)

e) ssuance of Invoice :  On the removal of goods i.e. 6thJuly 2017

f) Place of Supply :  Destination of Goods : Sri Lanka

g) Nature of Supply :  Inter State Supply in the form of Export

h) Type of Tax :Zero Rated Supply i.e. No Tax to be levied.

2. A Limited in Delhi sold the goods to B Limited of Sri Lanka on 5thJuly 2017.  However goods were to be shipped to United Kingdom.  A Limited removed the goods on 6th July 2017. A Limited filed the shipping bill on 8th July 2017 and custom authority issued the Let Export order on 10th July 2017.

In this case:

a) Taxable Event   :  Section 7(1)(a) : Supply in the form of Sales of Goods

b) Location of  Supplier :  Delhi

c) Location of Recipient : Sri Lanka

d) Time of Supply :  Filing of Shipping Bill i.e. 8thJuly 2017 (Note 2)

e) Issuance of Invoice :  On the removal of goods i.e. 6thJuly 2017

f) Place of Supply :  Destination of Goods : USA

g) Nature of Supply :  Inter State Supply in the form of Export

h) Type of Tax :Zero Rated Supply i.e. No Tax to be levied.

3. Lalit Limited in Delhi instructed its Dubai Branch Office to transfer the goods to Rashi Limited of Japan on 5thJuly 2017. Branch office of Lalit Limited removed the goods on 6th July 2017 and filed the shipping bill on 8th July 2017 with custom authority  of Dubai which issued the Let Export Order {LEO} on 10th July 2017.

In this case:

a) Taxable Event   :  No as movement of goods started outside India

b) Location of  Supplier :  Branch Office of Lalit Limited

c) Location of Recipient : Sri Lanka

d) Time of Supply :  Not Applicable

e) Issuance of Invoice :  Not Applicable

f) Place of Supply :  Destination of Goods : Japan

g) Nature of Supply :  Not an Export

h) Type of Tax :Not Applicable

4. Preyanshi Limited of Delhi transferred certain goods to its Branch located into Special Economic Zone –Uttar Pradesh on 5thJuly 2017.

In this case:

a) Taxable Event   :  Supply in the form of Transfer of goods

b) Location of  Supplier :  Location of Supplier i.e. Delhi

c) Location of Recipient :  Branch office of Preyanshi Limited in SEZ

d) Time of Supply :  Removal of Goods i.e. 5thJuly 2017

e) Issuance of Invoice :  On removal of goods i.e. 5thJuly 2017

f) Place of Supply :  Destination of Goods : SEZ

g) Nature of Supply :  Inter – State Supply

h) Type of Tax :Zero Rated Supply i.e.  No tax to be levied.

Here it is important to note branch office of Preyanshi Limited shall be considered as distinct person.

5. Preyanshi Limited situated in Special Economic Zone of NOIDA Uttar Pradesh transferred certain goods to its Branch located into Special Economic Zone of NOIDA –Uttar Pradesh on 5thJuly 2017.

In this case:

a) Taxable Event   :  Supply in the form of Transfer of goods

b) Location of  Supplier :  Location of Supplier i.e. SEZ NOIDA

c) Location of Recipient :  Branch office of Preyanshi Limited i.e. SEZ NOIDA

d) Time of Supply :  Removal of Goods i.e. 5thJuly 2017

e) Issuance of Invoice :  On removal of goods i.e. 5thJuly 2017

f) Place of Supply :  Destination of Goods : SEZ

g) Nature of Supply :  Inter – State Supply

h) Type of Tax :Zero Rated Supply i.e.  No tax to be levied.

6. Preyanshi Limited situated in Special Economic Zone of NOIDA Uttar Pradesh sold certain goods to a customer located in USA on 5thJuly 2017.  Preyanshi Limited removed the goods on 7th July 2017 and filed the shipping bill on 8th July 2017.

In this case:

a) Taxable Event   :  Supply in the form of sale of goods

b) Location of  Supplier :  Location of Supplier i.e. SEZ NOIDA

c) Location of Recipient :  USA

d) Time of Supply :  Filing of Shipping Bill

e) Issuance of Invoice :  On removal of goods i.e. 5thJuly 2017

f) Place of Supply :  Destination of Goods : USA

g) Nature of Supply :  Inter – State Supply

h) Type of Tax :Zero Rated Supply i.e.  No tax to be levied.

7. Preyanshi Limited situated in Special Economic Zone of NOIDA Uttar Pradesh sold certain goods to a customer located in Bulendshahr Uttar Pradesh Non SEZ area on 5thJuly 2017.  Preyanshi Limited removed the goods on 7th July 2017.

In this case:

a) Taxable Event   :  Supply in the form of sale of goods

b) Location of  Supplier :  Location of Supplier i.e. SEZ NOIDA

c) Location of Recipient :  Bulendshahr

d) Time of Supply :  Issuance of Invoice i.e. 7thJuly 2017

e) Issuance of Invoice :  On removal of goods i.e. 7thJuly 2017

f) Place of Supply :  Destination of Goods : Bulendshahr

g) Nature of Supply :  Inter – State Supply

h) Type of Tax : Inter- State Goods and Service Tax

5.0. Supply of Goods to Tourist

1. Meaning of Tourist:  –

“Tourist” means a person not normally resident in India, who enters India for a stay of  not more than six months for legitimate non-immigrant purposes {Explanation to Section 15 of IGST Act}

2. Nature of Supply:-

Any supply made to a tourist shall be considered as Inter State Supply {Third Proviso to Section 8(1) of IGST Act}

It is important to note that when the supplier and tourist are in the same state, even then such supply would be considered as inter- state supply.  

5.1 Place of Supply in Case of Service

In order to determine the place of supply, first there is a need to understand the nature of supply along with the various terms which will help us to understand the provisions relating to place of supply of service:

1. Intra State Supply:

Supply of services where the location of the supplier and the place of supply of services are in the same state or same union territory shall be treated as intra-State supply {Section 8(2) of IGST Act}

 However following supply of service would not be considered as intra –state supply even supplier of service and place of service are in the same state:

Supply of service to or by the Special Economic Zone Developer or a Special Economic Zone Unit {First Proviso to Section 8(2)of IGST Act}

2. Inter- State Supply:

1. Subject to Section 12, supply of service, where the location of supplier and the place of supply are in:

a) Two different states

b) Two different union territories; or

c) a state and a union territory

shall be treated as inter –state trade or commerce {Section 7(3) of IGST Act}

2. Supply of service imported into the territory of India shall be treated to be a supply of service in the course of inter- state trade or commerce.  {Section 7(4) of IGST Act}

3. Meaning of Import of Service:  {Section 2(11) of IGST Act}

Import of Service means the supply of service where;

(i) the supplier of service is located outside India;

(ii) the recipient of service is located into India;

(iii) the place of supply of service is in India;

4. Location of Supplier of Service:  means :-

a) Where a supply is made from a place of businessfor 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 theusual place of residence of the supplier;

{Section 2(15) of IGST Act corresponding to Section 2(71) of CGST Act}

5. Location of Recipient of Service: 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 residenceof the recipient;

{Section 2(14) of IGST Act corresponding to Section 2(70) of CGST Act}

6. 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 {Section 2(50) of CGST Act}

It is important to note that in order to constitute an establishment as fixed establishment, there must be proper infrastructure. What would constitute proper infrastructure would depend on economic relevancy of such place for business. There must be proper human and technical arrangement. Temporary visit of staff or nominal arrangement for the use of such place would not constitute that place as fixed establishment arrangement.

When a place is capable to execute an economic task with sufficient degree of independence then such place should be considered as fixed establishment.

7. Place of Business includes ————–

a) A place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

b) Place where a taxable person maintains his books of account; or

c) A place where a taxable person is engaged in business through an agent, by whatever name called;{Section 2(85) of CSGT Act}

Normally a place where the management of a business seats to take the decision about the business should be considered as place from where the business is ordinarily carried on.  

8. Usual Place of Residence means

a) In case of an individual, the place where he ordinarily resides;

b) In other cases, the place where the person is incorporated or otherwise legally constituted{Section 2(113) of CGST Act}

For better understanding, following examples should be considered:

a) Lalit JR Sharma & Associates, a chartered accountant firm situated in Darya Ganj -Delhi provides the service to different clients situated anywhere in India from its office.  Firm has taken the registration for such office in GST.

In this case

Registered office of Firm should be considered as Place of Business and also as location of supplier.

b) Lalit JR Sharma & Associates, a chartered accountant firm is situated in Darya Ganj –New Delhi.   Firm has taken the registration for such office in GST. However the firm provides the service from it’s another office situated in Greater Kailash- New Delhi.

In this case

Registered office of Firm i.e. office in Darya Ganj – New Delhi should be considered as Place of Business.

Office in Greater Kailash – New Delhi should be considered as Fixed Establishment along with Location of       Supplier

c) Preyanshi Limited incorporated in Switzerland set up an office in Connaught Place-New Delhi with staff in India to provide services to Indian Customer. Company has obtained the registration for such office.

In this case

Incorporated place i.e. Switzerland should be considered as Place of Residence, whereas  Connaught Place Office should be considered as Place of Business and should be considered as Location of Supplier.

9. Supply of service shall be treated as inter- state supply in following cases:

a. When supplier is located in India and place of supply is outside India: i.e. Export of Goods

b. To or by a special economic zone developer or a special economic zone units:

c. In the taxable territory, not being an intra –supply and not covered elsewhere in this section i.e. supply from non –taxable territory to a taxable territory.  {Section 7(5) of IGST Act}

10. Where a person has,––

(i) An establishment in India and any other establishment outside India;

(ii) An establishment in a State or Union territory and any other establishment outside that State or Union territory;

(iii) An establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory,

Then such establishments shall be treated as establishments of distinct persons {Explanation I to Section 8 of IGST Act}

11. A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory. {Explanation II to Section 8 of IGST Act}

5.1.2 Where the location of supplier of service and location of the recipient of service is in India {Section 12(1) of IGST Act}

Situation I:  When supply made to a registered person: Location of Recipient to whom supply made. {Section 12(2)(a)  subject to sub section (3) to sub section (14) of Section 12 of IGST Act}

(i) Rishi Limited an architect company based rendered the service to Tata Sons Limited (Mumbai based registered firm).  Rishi Limited started its work on 10thJuly 2017 and completed the service work on 14th August 2017. Rishi Limited raised the invoice on 26th August 2017.

Taxable Event
Location of Supplier
Location of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Registered office of Rishi Limited at Delhi
Registered office of Tata Sons Limited at Mumbai
Registered office at Mumbai
Inter – State Supply  as Location of supplier and place of supply is in different state
Issuance of Invoice  i.e. 26th August 2017 (invoice is issued within prescribed period) {Section 13(2)(a) of CGST Act
26th August 2017 in accordance to Section 31(2) {Invoice should be issued within the 30 days from  completion of service
Inter – State Good and Service Tax (IGST)

Situation II: When supply made to a person other than a registered person: Location of Recipient to whom supply made when address on record exists.  {Section 12(2)(b)(i)  subject to sub section (3) to sub section (14) of Section 12 of IGST Act}

Rishi Limited a Delhi based consultancy firm entered into a service contract with Rashi (Mumbai based) on 10th September 2017 to provide the consultancy   Rishi Limited started its work on 15th September 2017 and completed the service work on 20th October 2017. Rishi Limited raised the invoice on 22nd November 2017.

Taxable Event
Location of Supplier
Location of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Registered office of Rishi Limited at Delhi
Location of Rashi situated in Mumbai  as supply directly made to it.
Mumbai
Inter – State Supply as place of supply and location of supplier is in different state
Completion of Service   i.e. 20th October 2017 (invoice is issued after the expiry  prescribed period of 30 days) {Section 13(2)(b) of CGST Act
22nd November 2017 (invoice has been issued after the expiry of period of 30 days as mentioned in Section 31(2)
IGST

Situation III: When supply made to a person whose address is unknown: Place of supply is location of Supplier:—- {Section 12(2)(b)(i)  subject to sub section (3) to sub section (14) of Section 12 of IGST Act}

Geetanjili a famous Tax Expert in Kailash Colony -Delhi provides the service to her customers visited in her Office.  Priyanka Khandewal (Kanpur based) comes to Delhi and gives a visit in her office on 20th October 2017. She makes the payment after receiving the service against the issuance of invoice.

Taxable Event
Location of Supplier
Location of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Registered office of Geetanjili at Delhi
Unknown
Kailash Colony  Delhi
Intra State Supply as location of supplier and place of supply  is in Delhi
Issuance of Invoice   i.e. 20th October 2017 (invoice is issued within the   prescribed period of 30 days) {Section 13(2)(a) of CGST Act
20th October 2017
CGST and SGST

Situation IV: Service directly in relation to an immovable property, including services provided by

> Architects,

> Interior decorators,

> Surveyors, Engineers and other related experts or

> Estate agents,

>Any service provided

(i) by way of grant of rights to use immovable property or

(ii) for carrying out construction work; or

(iii) co-ordination of construction work;

Place of Supply shall be the location of Immovable Property is located or intended to be located (Section 12(3)(a) of IGST Act}

The above provisions could be simplified as follow:

1. Meaning of Immovable Property:

The GST Act has not defined the meaning of Immovable Property. In common parlance Immovable Property shall include

(i) Land

(ii) Benefits to arise out of land; and

(iii) Things attached to the earth; or permanently fastened to anything attached to the earth{Section 3(26) of General Clause Act 1897}

Based on above definition, we could refer that Building, Permanent structure attached to land, Bombay High {Oil extraction plant of ONGC} situated in Arabian Sea(even its certain portion is underwater and certain portion is above the water) should be considered as Immovable Property.

Further when a machine permanently fixed in earth by deep digging out that make that machine unmovable should be considered immovable property. It is important to note that  Permanently Fastened should not be considered that something once attached to earth cannot ever removed from earth, however it should be understand that something once attached to land should be remain affixed to land for a certain long time until less there is emergency to dismantle that something.

2. Inclusive list

The list of service that directly in relation to immovable property is inclusive in nature. This mean any service which has been given in direct nexus of immovable property would be covered by this limb.

3. Location of Recipient

If any service which has direct nexus with immovable property, then there nature and type of tax to be levied would be determined with location of immovable property, not by the location of recipient. Hence location of recipient is irrelevant in this limb.

4. Service provided by

> Way of right to use Immovable Property :– Renting or leasing of immovable property

> Carrying out Construction work :–  Construction service

> Co-ordination of Construction work :–  Co-ordination service such as labour service

5. With the help of following examples let’s try to understand the aforesaid provisions:

a) Rishi Limited an architect company situated in Delhi enters into a service contract with Godrej Properties Limited located in Maharashtra on 1stJuly 2017 to design a building in NOIDA- Uttar Pradesh.  Rishi Limited starts the on 10th July 2017 and completed the service on 31st December 2017. Rishi Limited raises the invoice on 20th January 2018.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Registered office of Rishi Limited at Delhi
Registered Office of Godrej Properties Limited in Maharashtra
NOIDA Uttar Pradesh
NOIDA Uttar Pradesh based on location of immovable property
Inter State Supply  as Location of Supplier is Delhi and Place of Supply is NOIDA (Section 7(3) of IGST Act}
Issuance of Invoice i.e. 20th January in accordance to Section 13(2)(a) of CGST Act
20th January 2017 in accordance to Section 31(2) of CGST Act
IGST

b) Amit Sharma a Delhi based registered Valuer enter into a service contract with Central Bank of India (Delhi Branch) for valuation of a land situated in Gurgaon – Haryana.  Amit Sharma starts his work on 28thSeptember 2017 and conducts a visit on 3rd October 2017. He submits his report on 24th October 2017 along with his invoice.

Services provided by Amit Sharma as registered Valuer shall be considered as service provided by an expert in relation to immovable property.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Registered office Amit Sharma i.e. Delhi
Branch office of Central Bank of India i.e. Delhi
Gurgaon – Haryana
Haryana based on location of immovable property
Inter State Supply  as Location of Supplier is Delhi and Place of Supply is Haryana (Section 7(3) of IGST Act}
Issuance of Invoice i.e. 24th October 2017 in accordance to Section 13(2)(a) of CGST Act
24th October 2017 in accordance to Section 31(2) of CGST Act
IGST

c) Yatish Sharma a real estate agent located in Chennai assists Bharat Sharma of Delhi to purchase a property in Chennai.  Yatish Sharma enters into a contract with Bharat Sharma on 10thAugust 2017 and he assists Bharat Sharma to purchase the property on 21st September 2017 and raise the invoice on 30th September 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Office of Yatish Sharma i.e. Chennai
Location of Bharat Sharma i.e. Delhi
Chennai
Chennai because location of
Intra – State Supply of Service as location of supplier and place of supply is within state
Issuance of Invoice i.e. 30th September 2017 in accordance to Section 13(2)(a) of CGST Act
30th September 2017 in accordance to Section 31(2) of CGST Act
CGST and SGST

d) Anshika Sharma & Associates a Delhi based software firm enter with Oil and Natural Gas Limited having head office at Delhi into a service contract to develop software to be used at Bombay High. Bombay High is an oil extraction plant situated in Arabian Sea. This contract is signed on 5thOctober 2017 and Software firm develop the system on 5th December 2017. Firm raise the invoice on 7th January 2017

Before putting the events in systematic order, we should the provisions enumerated by Section 9 of IGST Act. According to Section 9: Not withstanding anything contained in this Act (IGST Act)

> Where the place of supply is in territorial water; the place shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located {Section 9(b) of IGST Act}

 In above example, location of supply shall be considered the nearest coastal state i.e. Mumbai.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Office of Anshika Sharma & Associates in Delhi
Location of Head office of ONGC
Bombay High in Arabian Sea
Nearest Coastal State i.e. Mumbai according to Section 9
Inter State Supply
Completion of Service i.e. 5th December 2017 (since invoice has not been issued within 30 days in accordance to Section 13(2)(b) read with Section 31(2) of CGST Act
7th January 2017
IGST Act

e) JR Housing Limited a Delhi based company has business of leasing and renting of commercial and residential property. It has different kind of properties in different states. Praveen a Delhi based customer approaches JR Housing Limited to get a residential flat situated in Sunder Nagar- Delhi and enters into a contract starts from 10thSeptember 2017. Similarly Rajesh a Delhi based customer approaches for a flat situated in Darjeeling – West Bengal and enter into a contract on 23rd September 2017.

(i) Supply of Service between JR Housing Limited and Praveen

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(d) read with II Schedule}
Delhi – Registered office of JR Housing Limited
Delhi
Delhi
Delhi
Intra Supply
Such contract should be considered as continuous supply contract and taxable according to billing stage (discuss later on)
SGST and CGST

(i) Supply of Service between JR Housing Limited and Rajesh

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(d) read with II Schedule}
Delhi – Registered office of JR Housing Limited
Delhi
West Bengal
West Bengal
Inter – State Supply
Such contract should be considered as continuous supply contract and taxable according to billing stage (discuss later on)
IGST

f) ABC LLP a labour contractor based in Haryana enters into a contract of DLF Limited (Mumbai based) to provide the labour at various construction sites in Delhi, Haryana and Punjab. ABC LLP start to provide the labour on various location from 5thDecember 2017 and contract terminates on 14th February 2017.  ABC LLP raises the invoice on 28th February 2017.

Such service should be considered as co-ordination of construction service.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Haryana
Mumbai
Delhi
Delhi
Inter- State Supply
28th February 2017 in accordance to Section 13(2) of CGST Act
28th February 2017 in accordance to Section 31(2) of CGST
IGST
Haryana
Haryana
Intra- State Supply
CGST & SGST
Punjab
Punjab
Inter- State Supply
IGST

Situation V: Supply of service by way of lodging accommodation by:

a) Hotel:

b) Inn:

c) Guest House

d) Home stay

e) Club or campsite by whatever name called;

And including

f) a house boat or any other vessel

The place of supply shall be the location where such lodging accommodation (either immovable property, vessel or housing boat) is located {Section 12(3)(b) of IGST Act}

Ex: 1: Indian Hotel Limited (Bangalore based Company) is in Hotel Business having hotel in Karnataka, Chennai, and Delhi. A, B and C visit in hotel situated in Karnataka, Chennai, and Delhi respectively.   They stay over there from 1st July 2017 to 20th July 2017. While leaving from there, invoice has been raised by the hotel management.

Each location of hotel should be considered as fixed establishment because each hotel would be independent in its decision making and need to take separate registration

Taxable Event
Location of Supplier
Location of Recipient,
Location of Immovable Property
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(d)  read with Schedule II
Bangalore
Karnataka
Karnataka
Karnataka
Intra- State Supply
20th July 2017
20th July 2017
CGST & SGST
Chennai
Chennai
Chennai
Chennai
Intra- State Supply
CGST & SGST
Delhi
Delhi
Delhi
Delhi
Intra- State Supply
CGST & SGST

Situation VI: The place of service by way of accommodation in any immovable property for

> Organizing any marriage function or reception or any other matter related thereto

> Social, cultural, religious or business function

Including

> any services provided in relation to such function at such property

Place of supply shall be the location of immovable property is located.

Ex: 1:  Col. Rajeshwar of Delhi enters into a contract with Siddhartha (marriage consultant) of Delhi for his daughter’s marriage to be held on 8th July 2017.  Siddhartha books Umarah (Farm house) located in Gurgaon – Haryana. He also hires Sukhdev of Sonepat (Haryana) for catering work.  Umarah and Sukhdev raise the invoice on 14th July 2017. Similarly Siddhartha raises the invoice on 20th July 2017.

In this example there are three folds of contract

(i) Between Rajeshwar (Recipient) and Siddhartha (Supplier)

(ii) Between Siddhartha (Recipient) and Umarah (Supplier)

(iii) Between Siddhartha (Recipient) and Sukhdev (Supplier)

Sequence of events Between Rajeshwar (Recipient) and Siddhartha (Supplier)

Taxable Event
Location of Supplier
Location of Recipient
 
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(a)}
Delhi – Registered office of Siddhartha
Delhi- i.e. place of Rajeshwar
Delhi in accordance to Section 12(2)(b)(i)
Intra – State Supply in accordance to Section 8(2) of IGST Act
20th July 2017 in accordance to Section 13(2) of CGST Act
20th July 2017 in accordance to Section 31(2) of CGST Act
CGST & SGST

Sequence of events Between Siddhartha (Recipient) and Umarah (Supplier)

In this case, services provided by the Umarah is directly related with immovable property, hence place of supply will be determined by the location of immovable property. Further the nature of service would be depend on the location of supplier and place of service.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service  {Section 7(1)(d) read with Schedule II}
Registered office of Umarah i.e. Gurgaon Haryana
Registered office of Siddhartha i.e. Delhi
Gurgaon Haryana
Gurgaon  Haryana in accordance to Section 12(3)(c) of IGST Act
Intra – State Supply in accordance to Section 8(2) of IGST Act
14th July 2017 in accordance to Section 13(2) of CGST Act
14th July 2017 in accordance to Section 31(2) of CGST Act
CGST & SGST

 Sequence of events Between Siddhartha (Recipient) and Sukhdev (Supplier)

In this case, services provided by the Sukhdev is by Include part i.e. any services provided in relation to such function at such property , hence place of supply will be determined by the location of immovable property. Further the nature of service would be depend on the location of supplier and place of service

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Registered office of Sukhdev i.e. Sonepat Haryana
Registered office of Siddhartha i.e. Delhi
Gurgaon Haryana
Gurgaon  Haryana in accordance to Section 12(3)(c) of IGST Act
Intra – State Supply in accordance to Section 8(2) of IGST Act
14th July 2017 in accordance to Section 13(2) of CGST Act
14th July 2017 in accordance to Section 31(2) of CGST Act
CGST & SGST

Situation VII: The place of supply of any ancillary services in relation to Section 12(3)(a), Section 12(3)(b) and Section 12(3)(c)

Place of supply shall be location at which the immovable property, boat or vessel as the case may be is located or intended to be located.

Following services should be considered as ancillary service:

a) Repair and Maintenance Service

b) Installation service to make certain thing permanent fixed

c) Services by solicitor, loss adjuster and auctioneers

d) Legal service

Situation VIII: Supply of service, where immovable property, boat or vessel is located or intended to be located is outside India: Place of Supply shall be location of recipient {Proviso to Section 12(3) of IGST Act}

Ex. 1: L&T Limited (having registered office at Delhi) enters into a contract with Infosys Limited (Bangalore based company) on 5th December 2017 to construct a office in London. According to terms and conditions, invoices would be raised only when construction gets complete. L & T Limited completes the construction on 20th January 2018.  L & T Limited raises the invoice on 5th February 2018.

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Delhi
Bangalore
London
Bangalore
Inter- State Supply
5th February 2018
5th February 2018
IGST

Situation IX: Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, 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.

Ex: 1. L & T Limited (Chandigarh) enters into a contract with Wipro Limited (Chennai) to provide the interior decoration service at various offices located in Delhi, Chandigarh, London, Mumbai and Kolkata. L & T Limited completes the interior decoration services on 5th July 2017 and charges the following amounts for different locations by raising the invoice on 10th August 2017:  (Assuming IGST 18% and CGST 9% and SGST is 9%)

Delhi Office : Rs. 50000/-

Chandigarh Office : Rs. 60000/-

London Office : Rs. 100000/-

Mumbai Office : Rs. 30000/-

Kolkata Office : Rs. 25000/-

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Chandigarh
Chennai
Delhi
Delhi
Inter- State Supply
5th July  2017 (as invoice has not been raised with 30 days from completion of services)
10th August 2017
IGST : Rs. 9000 (50000*18%)
Chandigarh
Chandigarh
Intra State Supply
CGST : Rs. 5400
SGST: Rs. 5400
(60000*9% each)
London
Chennai (Proviso to Section)
Inter – State Supply
IGST: Rs. 18000
(100000*18%)
Mumbai
Mumbai
Inter – State Supply
IGST: Rs. 5400
(30000*18%)
Kolkata
Kolkata
Inter – State Supply
IGST: Rs.4500
(25000*18%)

Situation X: The Place of supply of

a) Restaurant and Catering Service;

b) Personal Grooming;

c) Fitness;

d) Beauty Treatment;

e) Health Service including cosmetic and plastic surgery

Shall be Location where the services are actually performed.  {Section 12(4) of IGST Act}

To understand the aforesaid provisions, following examples should be considered:

1. Rashi (Mumbai based Chartered Accountant) comes to Delhi to perform certain work and visits to Indian spices restaurant (Delhi Based) on 8thJuly 2017.  After taking dinner, she pays the bill.

Taxable Event Location of Supplier Location of Recipient Location where service performed Place of Supply Nature of Supply Time of Supply Issuance of Invoice Type of Tax to be Levied
Sale of  Service Delhi Delhi

 

Delhi i.e. location of restaurant Delhi Intra – State Supply 8th July 2017 8th July 2017 CGST & SGST

2. Indian Spices Restaurant (Delhi Based) enters into a contract with Iscon Mandir to provide catering service in Mumbai on 21stDecember 2017.  Indian Spices Restaurant raises the bill on 31st December 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location where service performed
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Delhi
Delhi
Mumbai where catering service provide
Mumbai
Inter- State Supply
31st December 2017
31st December 2017
IGST

It is important to provide that the lists described above are not inclusive in nature.  However these services are board heading to cover many specific services that may be performed under the umbrella of above listed services. For example, under the fitness following services may be performed;

a) Yoga

b) Aerobics

c) Gym

Hence services must be examined very carefully to fall with the scope of this provision.

Situation XI:  When service is provided in respect of training and personal appraisal, The Place of Supply shall be:

When service is given to a registered person : Location of Recipient

When given to unregistered person : Location of Performance of Service   

{Section 12(5) of IGST Act}

Meaning of Personal Appraisal: Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development.

1. Infosys Limited (Chennai Based Registered Company) enters into a service contract with JR Associates (a Delhi Based CA Firm) to provide training session on GST to its employees in Delhi. JR Associates provide the service on 10thSeptember 2017 and raises the invoice on 12th October 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location where service performed
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Delhi
Chennai
Delhi
Chennai as location of registered recipient
Inter- State Supply
10th September 2017, as invoice is not raised within 30 days
12th October  2017
IGST

2. *Sharda Foundation Trust (a charitable trust of Uttar Pradesh) enters into a service contract with JR Associates (a Delhi Based CA Firm) to provide training session on performance appraisal to its employees in Delhi. JR Associates provide the service on 10thSeptember 2017 and raises the invoice on 12th October 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location where service performed
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Delhi
U.P.
(it is not a registered person)
Delhi
Delhi where service actually performed
Intra State supply
10th September 2017, as invoice is not raised within 30 days
12th October 2017
CGST & SGST

Situation XII:  When service provided by way of Admission to

a) Cultural;

b) Artistic, Sporting;

c) Scientific, Educational;

d) Entertainment Event;

e) Amusement Park or any other place; and

f) Services ancillary thereto

Place of supply shall be

a) Where the event is actually held; or

b) Where the park or such other place is located {Section 12(6) of IGST Act}

1. Ancillary Service that relates to admission may includes, providing the 3D specs in hunter village (amusement park) where the service charge for 3D specs is not included in admission ticket.

2. Examples for aforesaid provisions are as follows:

a) Anand Kumar runs a coaching center namely super 30 to provide education. In order to promote education in Delhi, Anand Kumar organizes an education event in Indira Gandhi Indoor Stadium on 31stAugust 2017.  To participate in event, prospective student shall pay Rs. 500 as admission fee.  Yuvika pay Rs. 500/- as admission fee and participate in the event held on 31st August 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location where event held
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Bihar
Delhi
Delhi
Delhi where event actually held
Inter State supply
31st August 2017
31st August 2017
IGST

b) Delhi Doll Museum is a famous destination for different types of doll collected from various counties around the world.  DPS NOIDA organizes a picnic tour for school children to visits the museum on 14thAugust 2017.  Delhi Doll Museum collects admission fees and allows the students to get enter into museum.

Taxable Event
Location of Supplier
Location of Recipient
Location where amusement place
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Type of Tax to be Levied
Sale of  Service
Delhi
NOIDA
Delhi
Delhi where amusement place located
Intra – State Supply
14th August 2017
14th August 2017
CGST and SGST

3. Service that is covered under here relates only to admission in any event; not the organization of event.

Situation XIII: Where the service provided by way of organizing

a) a cultural event;

b) an artistic event;

c) a sporting event;

d) a scientific or educational event {First Limb is for Event Management Service}

Including service in relation to

a) a conference;

b) a fair;

c) a exhibition;

d) a celebration or similar events;  {Second Limb is for services for specific events}{Section 12(7) (a) of IGST Act}

 Or;

Services ancillary to organization of the events or services referred to in clause (a) or service of assigning of sponsorship to such event {Third Limb is for ancillary event or sponsorship service} {Section 12(7) (b) of IGST Act}

Place of supply in respect of above:

a) When provided to a registered person (registered recipient):  Location of Registered Person

b) When provided to a person other than registered person{ unregistered person}:  Location where event actually held

1. First limb of provision relates to event management services provided by an event management firm to any person whether registered or unregistered.

2. Second limb relates to service in relation to certain specific events. Services in relation to certain specific events cover two parts:

a) Service for assisting in organizing the event {service by event management firm to a person who organize the event, if hires the event management firm}

b) Service by way of admission in such specific event {admission service provided by the person who organize the event to participants of such event}

3. Third limb relates to ancillary services or sponsorship service. Ancillary service might include

> Sound engineering service in relation to an artistic events {DJ Services}

> Catering service to provide the meals in

4. Third limb of provision contains the sponsorship service providing in relation to any event specified in first or second limb, such as Reliance foundation sponsor a cricket match organized by ICAI. In this case ICAI (who is receiving the sponsorship) is providing the service.

5. To understand the above provisions; following examples should be considered:

a) TCS Limited (Registered office in Mumbai) entered into a service contract with Triveni Arts (Delhi based firm) to organize a sporting event for its employees in Delhi Cricket Stadium on 23rdAugust 2017.  To view the match, visitor paid, entrance fee of Rs. 100 /- per person.  Triveni Arts entered into following contracts with other registered persons to organize such event:

i. For catering service : Haldiram (Registered office in Delhi)

ii. For Singing and Dancing : Daljit Dosanjh (Registered office in Punjab)

Reliance Limited (Registered office in Mumbai) came forward to sponsor such event and paid Rs. 10 Lacs to TCS in advance on 10th August 2017.

Invoices were raised as follows:

1. By Triveni Arts to TCS Limited : on 25thSeptember 2017 (amounting to Rs. 40 Lacs)

2. By Haldiram to Triveni Arts : on 28thAugust 2017 (amounting to Rs. 8 Lacs)

3. By Daljit Singh Dosanjh to Triveni Arts : on 10thSeptember 2017  (amounting to Rs. 5 Lacs)

4. By TCS to Reliance Limited : on 23rdSeptember 2017 (amounting Rs. 20 Lacs)

5. By TCS to Audience of Match : on 23rdAugust 2017

6. By Delhi Cricket Stadium to TCS : on 25thAugust 2017 (amounting to Rs. 8 Lacs)

Now the sequence of events is as follows:

By Triveni Arts to TCS Limited (Service for organizing the Event in accordance to Section 12(7)(a) of IGST Act}

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Delhi i.e. Registered office
Mumbai i.e. Registered office of TCS
Delhi
Mumbai in accordance to Section 12(7) of IGST
Inter– State Supply in Accordance to Section 7(3) of IGST
23rd August 2017 i.e. completion of service {Section 13(2)(b) of CGST Act
25th September 2017
Rs. 40 Lacs i.e. Transaction value
IGST

By Haldiram to Triveni Arts {Ancillary service in accordance to Section 12(7)(b) of IGST Act}

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Delhi i.e. Registered office  of Haldiram
Delhi i.e. Registered Office of Triveni Arts
Delhi
Delhi in accordance to Section 12(7) of IGST i.e.  Location of Recipient
Intra State Supply
28th August 2017  (Section 13(2)(a) of IGST
28th August 2017 {Section 31(2) of IGST}
Rs. 8 Lacs i.e. Transaction value
CGST & SGST

By Daljit Singh Dosanjh to Triveni Arts {Ancillary service in accordance to Section 12(7)(b) of IGST Act}

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Punjab i.e. Registered office  of Daljit
Delhi i.e. Registered Office of Triveni Arts
Delhi
Delhi in accordance to Section 12(7) of IGST i.e.  Location of Recipient
Inter – State Supply
28th August 2017  (Section 13(2)(a) of CGST
28th August 2017 {Section 31(2) of IGST}
Rs. 5 Lacs i.e. Transaction value
CGST & SGST

By TCS Limited to Reliance Limited (Sponsorship service according to Section 12(7)(b) of IGST Act)

Meaning of Sponsorship Services: Sponsorship” includes naming an event after the sponsor, displaying the sponsor’s company logo or trading name, giving the sponsor exclusive or priority booking rights, sponsoring prizes or trophies for competition.

In the given example; Reliance Limited has given advance before the event and TCS Limited raises the invoice for complete service before adjusting the invoice:

On the receipt of advance payment

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Mumbai i.e. Registered office  of TCS Limited
Mumbai i.e. Registered office of Reliance Limited
Delhi
Mumbai i.e. Registered office of Reliance Limited
Intra State Supply
10th  August 2017  (Section 13(2)(a) of CGST for advance payment
Receipt voucher on 10th August 2017
Rs. 10 Lacs i.e. Transaction value
CGST & SGST

By the issue of invoice

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Mumbai i.e. Registered office  of TCS Limited
Mumbai i.e. Registered office of Reliance Limited
Delhi
Mumbai i.e. Registered office of Reliance Limited  {Section 12(7)(a) of IGST Act
Intra State Supply
23rd August 2017  i.e. completion of service as invoice is not issued within 30 days
23rd September 2017
Rs. 20 Lacs i.e. Transaction value
CGST & SGST

Note: Service by way of sponsorship is covered by service charge mechanism

By TCS Limited to Viewers

Taxable Event
Location of Supplier
Location of Recipient
Location of Event
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Mumbai i.e. Registered office  of TCS Limited
Delhi
Delhi
Delhi i.e. where event is actually held in accordance to Section 12(6) of IGST Act
Inter State  Supply
23rd August 2017
23rd September 2017  in accordance to Section 31(3)(b) of CGST Act
Rs. 100 i.e. Transaction value
IGST

 By Delhi Cricket Stadium to TCS

Taxable Event
Location of Supplier
Location of Recipient
Location of Immovable Property
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Delhi i.e. Registered office of  DCS
Mumbai
Delhi
Delhi i.e. where immovable  is actually located in accordance to Section 12(3) of IGST Act
Inter State  Supply
23rd August 2017
23rd September 2017  in accordance to Section 31(3)(b) of CGST Act
Rs. 8  i.e. Transaction value
IGST

Where the event is held in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such event, the place of supply of such services shall be taken as being in each of the respective States or Union territories 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

Situation XIV:  When received is provided by way of transportation of goods including the courier or mail,

The place of supply shall be:

When Supply is made to a registered recipient When supplied is made to an unregistered recipient
Location of Registered Person {Section 12(8)(a) of IGST Act} Location at which such goods are handed over for their transportation {Section 12(8)(b) of IGST Act}

1. Hero Motors Limited entered into a service contract with Jaipur Golden Limited to transport the certain stock from its Delhi Outlet to its Haryana Outlet (Registered office in Haryana). Delhi Outlet handed over the goods on 10thSeptember 2017 to Jaipur Golden Limited under the issuance of invoice and goods reached on 28th September 2017. Sale price of identical goods was Rs. 5cr. Golden Limited raised the invoice on 5th October 2017 amounting to Rs. 120000/-.

Under this example, there are two type of supply

a) Supply of Service : From Jaipur Golden Limited to Hero Motors Limited

b) Supply of Goods : From Delhi Outlet to Haryana Outlet.

From Jaipur Golden Limited to Hero Motors Limited (Delhi Office)

Taxable Event
Location of Supplier
Location of Recipient
Location where goods given
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Delhi i.e. Registered office of  Jaipur Golden Limited
Haryana
Delhi
Haryana i.e. location of recipient in accordance to Section 12(8) (a) of IGST
Inter State  Supply as supplier and location of supply is in different state
5th October  2017  In accordance to Section 13(2) of CGST
5th October 2017
Rs. 120000/- i.e. Transaction value
IGST

From Delhi Outlet to Haryana Outlet

Taxable Event
Location of Supplier
Location of Recipient
Point of Taxation
Place of Supply
Issue of Invoice
Nature of Supply
Value of Goods
Type of Taxes to be levied
Supply of Goods {Section 7(1)(c) read with Schedule I}
Delhi outlet
Haryana Outlet
The date of Issue of Invoice by the Supplier {Section 12(2)(a)}
Where the movement of goods terminate for delivery to the Recipient i.e. Haryana {Section 10(1)(a) of IGST Act}
Issue of Invoice shall be on or before the Removal of Goods. {Section 31(1)(a)}
Inter State Supply according to Section 7(1) of IGST Act  as location of supplier and place of supply is in different state
Value of Identical goods in accordance to Section  15(4)  read with rule 2 of valuation rule i.e. Rs. 5 crore
Inter – State Goods and Service Tax

2. Hero Motors Limited entered into a service contract with Jaipur Golden Limited to transport the one motorcycle from its Delhi Outlet to its Customer in Haryana. Delhi Outlet handed over the goods on 10thSeptember 2017 to Jaipur Golden Limited under the issuance of invoice and goods reached on 12th September 2017. Golden Limited raised the invoice on 5th October 2017 amounting to Rs. 120000/-.

Taxable Event
Location of Supplier
Location of Recipient
Location where goods handed over
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of  Service
Delhi i.e. Registered office of  Jaipur Golden Limited
Haryana
Delhi
Delhi i.e. location where goods are handed over for transport 12(8) (a) of IGST
Intra – State supply as location of supplier and place of supply in same state
5th October  2017  In accordance to Section 13(2) of CGST
5th October 2017
Rs. 120000/-
i.e. Transaction value
CGST and SGST

Note:  Service provided by Goods Transport Agency to specified persons (discussed later) would be covered by Reverse  Charge Mechanism.

Situation XV:  When service is provided by way of passenger service,

The place of supply shall be:

When Supply is made to a registered recipient When supplied is made to an unregistered recipient
Location of Registered Person {Section 12(9)(a) of IGST Act} Place where the passenger embarks on the conveyance for a continuous journey{Section 12(9)(b) of IGST Act}

1. Meaning of Continuous Journey { Section 2(3) of IGST Act}

Continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service (Travel service agency) or through an agent acting on behalf of more than one supplier of service (travel agent), and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

Explanation to Section 2(3) of IGST Act

For the purposes of this clause, the term “stopover” means a place where a passenger can disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time.

2. For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time. {Explanation to Section 12(9) of IGST Act}

3. Conveyance includes a vessel, an aircraft and a vehicle. {Section 2(34) of CGST Act}

4. Example for above provisions are as follows:

a) Preyanshi (Faridabad based) enter into a contract on 10thSeptember 2017 with ABC Travel Agency (Faridabad Based) to give a car on hire for the journey from Faridabad to Shimla for 28th September 2017.  She also books a return journey for 3rd October 2017. Travel Agent issues the invoice on the 10th October 2017 by charging Rs. 10500 for each journey.

For the Faridabad to Shimla {This is the case where service is provided to Unregistered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Preyanshi i.e. Faridabad
Faridabad
Faridabad in accordance to Section 12(9)(b) of IGST Act
Intra State Supply as location of supplier and place of supply are within state (Section 8(2) of IGST}
10th October 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th October 2017 in accordance to Section 31(2) read with invoice rule
Rs. 10500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

For the Shimla to Faridabad {this is the case where service is provided to Unregistered Recipient)

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
 
 
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Preyanshi i.e. Faridabad
Shimla (return journey should be treated as separate journey
Shimla in accordance to Section 12(9)(b) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
10th September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th October 2017 in accordance to Section 31(2) read with invoice rule
Rs. 10500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

b) Preyanshi (Faridabad based) enter into a contract on 10thSeptember 2017 with ABC Travel Agency (Faridabad Based) to hire a car for the journey from Delhi – Chandigarh to Vaishno Devi (Jammu and Kashmir) for 28th September 2017. Travel Agent issues the invoice on the 10th October 2017 by charging Rs. 10500/- for booking excluding basic fare.

For the Delhi – Chandigarh – Jammu Kashmir {This is the case where service is provided to Unregistered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Preyanshi i.e. Faridabad
Delhi
Delhi in accordance to Section 12(9)(b) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
10th October 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th October 2017 in accordance to Section 31(2) read with invoice rule
Rs. 10500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST Act

c) Rishi Limited (Faridabad based) enter into a contract on 10thSeptember 2017 with ABC Travel Agency (Faridabad Based) to give a car on hire for the journey from Faridabad to Shimla for 28th September 2017. It also books a return journey for 3rd October 2017. Travel Agent issues the invoice on the 10th October 2017 by charging Rs. 10500 for each journey.

For the Faridabad to Shimla {this is the case where service is provided to registered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Rishi Limited i.e. Faridabad
Faridabad
Faridabad in accordance to Section 12(9)(a) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th October 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th October 2017 in accordance to Section 31(2) read with invoice rule
Rs. 10500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

For the Shimla to Faridabad {this is the case where service is provided to registered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Rishi Limited i.e. Faridabad
Shimla
Faridabad in accordance to Section 12(9)(a) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th October 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th October 2017 in accordance to Section 31(2) read with invoice rule
Rs. 10500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

d) Preyanshi enters into a service contract with ABC Travel Agency to book a car for travelling from Faridabad to Delhi to Chandigarh on 10thSeptember 2017.  ABC Travel Agency provides the car for respective place. However Preyanshi needs to change the car in Delhi to visit Delhi to Chandigarh. Branch office of ABC Travel Agency provides to car for further journey.  ABC Travel Agency and branch office raises the invoice on 20th September 2017 by charging Rs. 4800/- and Rs. 3000/- respectively.

In the above example, since Preyanshi enters into a single contract of service, but journey has been performed on stopover basis. i.e. from Faridabad to Delhi and Delhi to Chandigarh. Further for ABC travel Agency and Branch Office, recipient is different.

> For ABC Travel Agency : Preyanshi  is Recipient

> For Branch office : ABC Travel Agency is recipient

Further ABC travel agency has to segregate invoice by mentioning the amount charged for journey of Faridabad to Delhi and Delhi to Chandigarh, since the place of supply is different.

Service from ABC Travel Agency to Preyanshi

For the Faridabad to Delhi {This is the case where service is provided to Unregistered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Preyanshi i.e. Faridabad
Faridabad
Faridabad in accordance to Section 12(9)(b) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
20th September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
20th September 2017 in accordance to Section 31(2) read with invoice rule
Rs. 1800 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST & SGST

For the Delhi to Chandigarh {this is the case where service is provided to Unregistered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Preyanshi i.e. Faridabad
Delhi
Delhi in accordance to Section 12(9)(b) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
20th September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
20th September 2017 in accordance to Section 31(2) read with invoice rule
Rs. 3000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

From Branch office to ABC Travel Agency

For the Delhi to Chandigarh {This is the case where service is provided to registered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Branch office ABC i.e. Delhi
Location of ABC Travel Agency  i.e. Faridabad
Delhi
Faridabad in accordance to Section 12(9)(a) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
20th September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
20th September 2017 in accordance to Section 31(2) read with invoice rule
Rs. 3000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

e) Rishi Limited (Faridabad based) enter into a contract on 10thSeptember 2017 with ABC Travel Agency (Faridabad Based) to book the air ticket  for its Saurabh Sharma  for the journey from Delhi – London for 28th September 2017.  Travel Agent issues the invoice on the same day by charging Rs. 3500/- for booking and Rs. 55500 (basic fare)/- for ticket from Air India (having registered office at Delhi).  Travel Agent gets 5% commission on booking of air ticket from Air India by raising the invoice on 20th September 2017.

These types of contracts have three layers of services

a) From Travel Agent to Rishi Limited (Commission services)

b) From Travel Agent to Air India (Commission services)

c) From Air India to Employee of Rishi Limited

Travel Agent plays the role of mediator between supplier of service i.e. Air India and Recipient of Service i.e. Rishi Limited.  The service provided by Travel Agent should be determined in accordance to Section 12(2) of IGST Act, whereas service provided by Air India to Employee of Rishi Limited should be determined by the Section 12(9) of IGST Act.

Service from Travel Agent to Rishi Limited

For the Delhi – Chandigarh – Jammu Kashmir {this is the case where service is provided to registered Recipient}

Taxable Event
Location of Supplier
Location of Recipient
Place where passenger  embark on conveyance
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of ABC i.e. Faridabad
Location of Rishi Limited i.e. Faridabad
Delhi
Faridabad in accordance to Section 12(2) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th September 2017 in accordance to Section 31(2) read with invoice rule
Rs. 500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

Situation XVI: When service is provided on

> Board a conveyance including

a) A vessel

b) An Aircraft

c) A train

d) A motor  Vehicle

Place of supply shall be the location

First Scheduled Point of Departure of that conveyance for the journey {Section 12(10) of IGST}

To understand this, following examples should be considered:

1. Rashi a famous singer (Mumabi) enter into a contact with Atlantic Limited (owned a cruise) to sing song on its ship during the journey from Mumbai to London. The ship departs from Mumbai on 1stOctober 2017 and return back on 2nd January 2018. Rashi raises the invoice on 25th January 2018 by charging Rs. 100000/-

Taxable Event
Location of Supplier
Location of Recipient
Location of First scheduled point of  departure  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Rashi i.e. Mumbai
Location of Atlantic Limited i.e. Mumbai
Mumbai
Mumbai in accordance to Section 12(10) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
25th January 2018 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
25th January 2018 in accordance to Section 31(2) read with invoice rule
Rs. 100000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

2. Infosys Limited (Chennai Based Company) provides software management service to Air India (Chennai Based Office) to its Aircraft departing from Delhi on 23rdSeptember 2017.  Infosys Limited raises the invoice of Rs. 100000 on 1st October 2017.

Taxable Event
Location of Supplier
Location of Recipient
Location of First scheduled point of  departure  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Infosys i.e. Chennai
Location of Atlantic Limited i.e. Chennai
Delhi
Delhi in accordance to Section 12(10) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
1st October 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
1st October 2017in accordance to Section 31(2) read with invoice rule
Rs. 100000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

3. Tata Motors Limited (Mumbai Based) enters into a service contract with Reliance Limited (Mumbai Based) to provide technical assistance service on its vessel located into Singapore 1stJuly 2017 from where the vessel moves to India.  Tata Motors Limited provides the service on 5th August 2017 and raise the invoice on 2nd  September 2017 amounting to Rs. 500000/-

Before the proceeds, we need to understand the provision enumerated in Section 7(5)(a):

Supply of goods or service or both

a) When the supplier is located into India and place of supply is outside India,

Then supply of goods or service or both shall be treated inter – state supply.

Taxable Event
Location of Supplier
Location of Recipient
Location of First scheduled point of  departure  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service  on 1st July 2017
Location of Tata Motors  Limited i.e. Mumbai
Location of Reliance Limited i.e. Chennai
Singapore
Singapore in accordance to Section 12(10) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(5)(a) of IGST}
2nd September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
2nd September 2017in accordance to Section 31(2) read with invoice rule
Rs. 500000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

4. A Limited (in non taxable territory) enters into a service contract with Reliance Limited (Mumbai Based) to provide technical assistance service on its Aircraft located into  Mumbai 1stJuly 2017 from where the Aircraft moves to USA.  Tata Motors Limited provides the service on 5th August 2017 and raise the invoice on 2nd  September 2017 amounting to Rs. 500000/-

Before the proceeds, we need to understand the provision enumerated in Section 7(5) (c):

Supply of goods or service or both

(c) When supply is made in a taxable territory; not being an intra – state supply and not covered elsewhere in this section;    

     Then supply of goods or service or both shall be treated inter – state supply.

Taxable Event
Location of Supplier
Location of Recipient
Location of First scheduled point of  departure  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service  on 1st July 2017
Location of A Limited i.e. Mumbai
Location of Reliance Limited i.e. Mumbai
Mumbai
Mumbai in accordance to Section 12(10) of IGST Act
Inter State Supply as location of supplier and place of supply are in different state (Section 7(5)(c) of IGST}
2nd September 2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
2nd September 2017in accordance to Section 31(2) read with invoice rule
Rs. 500000 i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST

Situation XVI: When service of

> Telecommunication; Data Transfer

> Broadcasting; Cable; Direct to Home Television

  is provided to any person by way of

> Fixed telecommunication line; Leased circuit; Leased internet circuit;

> cable line;  Dish antenna

The place of supply shall be the location where telecommunication line; leased circuit, cable connection or dish antenna is installed for receipt of service {Section 12(11) (a) of IGST Act}

1. Tata Sky (Office in NOIDA) provides the service DTH service to Ankita Bansal located into NOIDA- Uttar Pradesh, where dish antenna is installed to receipt the service. Tata Sky raises the bill on monthly basis on 10thof succeeding month amounting to Rs. 500/- per month.  Let’s suppose Tata Sky provides the service in the month of April 2017

Taxable Event
Location of Supplier
Location of Recipient
Location where device is installed  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Tata Sky Limited i.e. NOIDA
Location of Ankita Bansa i.e. NOIDA
NOIDA – Uttar Pradesh
NOIDA – Uttar Pradesh in accordance to Section 12(11)(a) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th May  2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th May 2017in accordance to Section 31(2) and Section 31(5) read with invoice rule
Rs. 500 i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST & SGST

2. DEN Limited (registered office at Haryana) operated into Haryana enters with DTH service with Rishi Limited (a cable service provider of Haryana) by installing the Dish TV at Hisar –Haryana with further cable line to final subscribers on monthly payment of Rs. 500/-. Let’s suppose month of business is July 2017. JR Limited raise the commission invoice on   10thAugust 2017 of Rs. 50000/-

From DEN Limited to Final Subscriber

Taxable Event
Location of Supplier
Location of Recipient
Location where device is installed  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of DEN Limited i.e. Delhi
Location of Final Subscriber i.e. Haryana
Hisar Haryana
Hisar Haryana in accordance to Section 12(11)(a) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th August  2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th August 2017in accordance to Section 31(2) & Section 31(5)  read with invoice rule
Rs. 500/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST & SGST

 From Rishi Limited to DEN Limited

Taxable Event
Location of Supplier
Location of Recipient
Registered office
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Rishi Limited i.e. Hisar Haryana
Location of DEN Limited
Hisar – Haryana
Hisar – Haryana
in accordance to Section 12(2)(a) of IGST Act
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th August  2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th August 2017in accordance to Section 31(2) read with invoice rule
Rs. 50000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST & SGST

Further, where MTNL or BSNL provides fixed landline telephone service, place of supply of shall be determined in accordance to place where instrument is installed to receive the connectivity.  Similarly Airtel Limited uses the fixed telecommunication of BSNL on lease to provide the fixed telephone tele- call service including the internet service.

Situation XVII: Where mobile connection service is provided on post paid basis for:

a) telecommunication service

b) internet service

The place of supply shall be billing address of recipient of service on the record of the supplier. {Section 12(11)(b) of IGST Act}

Here mobile connection service is provided through digital waves instead of fixed telephone line.

1. Airtel Limited (Delhi Based) provides the telephone service to of JR Limited (Delhi Based). Such Billing is provided on monthly basis, 10thday every month succeeding the previous month by charging Rs. 2000/- per month.  Let’s billing month is July 2017.

Taxable Event
Location of Supplier
Location of Recipient
Billing Address of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service
Location of Airtel Limited i.e. Delhi
Location of JR Limited i.e. Delhi
Delhi
Delhi accordance to Section 12(11)(b) of IGST Act
Intra State Supply as location of supplier and place of supply are in different state (Section 8(2) of IGST}
10th August  2017 i.e. issuance of invoice on the completion of service in accordance to Section 13(2) of CGST Act
10th August 2017in accordance to Section 31(2) and Section 31(5) read with invoice rule
Rs. 2000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST & SGST

It is important to note that Telecommunication Company appoints certain firm to help in getting the customer. These are normally called franchises and get commission from Telecommunication Company.  In this case place of supply should be determined in accordance to Section 12(2) of IGST Act.

Situation XVIII: When mobile connection service for telecommunication, internet service and direct to home television service is provided on pre payment basis through voucher or other means through:

A selling agent; a re-seller; a distributor of subscriber identity module card or re- charge voucher

The Place of Supply shall be the address of the selling agent or re- seller or distributor as per the record of the supplier at the time of supply {Section 12(11)(c)(i)}; or

By any person to the final subscriber; be the location where such pre-payment is received or such voucher is sold. {Section 12(11)(c)(ii)}

In the above situation there are many sub situations as discussed with the following examples:

1. Reliance Limited (Delhi) appoints JR Limited (Delhi) as its authorised distributorsfor selling the SIM card and re-charge voucher. Reliance Limited supplies the re-charge vouchers starting from serial number 102054 to 202450 to JR Limited on MRP basis on 25th August 2017. Let’s suppose the value of a single re-charge voucher is Rs. 1180 including the GST @ 18%. JR Limited sales 5000 recharge vouchers starting from 102054 to 107054 on 5th September 2017. JR Limited remits the payment to Reliance Limited on 10th September 2017. For the distribution service, Reliance Limited gives 10% commission on basic value of recharge out of sales proceeds. JR Limited raises the invoice on Reliance Limited 10th September 2017.  Further Reliance Limited shall provide the effective service from Delhi.

In the above example, there are two types of service involved:

a) From Reliance Limited to Final Consumer

b) From JR Limited to Reliance Limited

From Reliance Limited to Final Consumer

Taxable Event
Location of Supplier
Location of Distributor
Address of Distributor
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Transfer of re- charge voucher  Service in accordance to Section 7(1)(a)
Location of Reliance Limited i.e. Delhi
Location of JR Limited i.e. Delhi
Delhi
Delhi in accordance to Section 12(11)(c)(i)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
5th September  2017 i.e. receipt of pre- payment  Section 13(2) of CGST Act
5th September 2017in accordance to Section 31(3)(d) read with invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 1000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act (1800*100/118)
CGST and IGST

Even Reliance Communication Limited is Mumbai based company, but under the current scenario, it has to take different registration on each place from where effective supply of service start. In this case Reliance Communication is providing the effective service from its Delhi circle, hence that place shall be considered location of supplier.

From JR Limited to Reliance Limited

Taxable Event
Location of Supplier
Location of Recipient
Registered office of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sales of Service in accordance to Section 7(1)(a)
Location of JR Limited i.e. Delhi
Location of Reliance Limited i.e. Delhi
Delhi
Delhi in accordance to Section 12(2)(a)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th  September  2017 i.e. issuance to Invoice in accordance  Section 13(2) of CGST Act
 10th September 2017 in accordance to Section 31(2) read with invoice rule
Rs. 500000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act.
IGST

The basic procedure should be as follows:

a) Reliance Limited shall pay GST on transaction value i.e. (5000*1000)*18% Rs. 900000/- and take the credit of commission expenses which is Rs. 90000/-.

b) Under Distributor business, normally distributor doesn’t pay the money at the time of receipt of recharge voucher. If Distributor gives money against the recharge vouchers, such payment should be against advance payment for receives to be rendered. Reliance Limited should pay the GST by considering the provisions of Section 13(2) of CGST Act i.e. receipt of payment or issuance of invoice whichever is earlier.

2. Reliance Limited (Delhi) sales to JR Limited (Delhi), 25000 recharge vouchers of Rs. 590 talktime (inclusive of GST) at discounted price of Rs.  560 per recharge voucher on 5thJuly 2017 and received the payment from JR Limited on 7th July 2017 and consequently issue the invoice. JR Limited sales 2000 vouchers on 10th July 2017.

In the above case JR Limited shall be considered as re-seller. Further the time of supply of from Reliance Limited to JR Limited and from JR Limited to Customers should be determined in respective date of supply.

From Reliance Limited to JR Limited

Taxable Event
Location of Supplier
Location of Reseller
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Transfer of re- charge voucher  Service in accordance to Section 7(1)(a)
Location of Reliance Limited i.e. Delhi
Location of JR Limited i.e. Delhi
Delhi in accordance to Section 12(11)(c)(ii)
Intra State Supply as location of supplier and place of supply are in different state (Section 8(2) of IGST}
7th July  2017 i.e. receipt of pre- payment  Section 13(2) of CGST Act
7th July 2017in accordance to Section 31(2) and read with invoice rule
Rs. 11875000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act (560*100/118)*25000
IGST

1. According to section 31(2) of CGST Act:

Registered Person shall before or after the provision of service but within a prescribed period, issue a tax invoice.

2. Reliance Limited shall pay GST in accordance to transaction value i.e. Rs. 475 per re-charge voucher when transfer the vouchers to JR Limited along with It shall issue a tax invoice even before the provision of service and credit shall be available JR Limited.

From JR Limited to final subscriber

Taxable Event
Location of Supplier
Location of Final Subscriber
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sales of re- charge voucher  Service in accordance to Section 7(1)(a)
Location of JR Limited i.e. Delhi
Delhi
Delhi in accordance to Section 12(2)(b)(ii)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th July  2017 i.e. receipt of pre- payment  Section 13(2) of CGST Act
10th July 2017in accordance to Section 31(2) and read with invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 1000000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act (590*100/118)*2000
CGST and SGST

Note:

> Place of supply of service provided by JR Limited to final subscriber shall be determined in accordance to Section 12(2)(b)(ii) of IGST Act.

> JR Limited should be entitled to take the input of tax charged by Reliance Limited.

Situation XIX: Where telecommunication service including data transfer, broadcasting, cable and direct to television service is provided in other manner other than as specified in sub-clause (a), (b), and (c),

If address of recipient is known: Then place of supply shall be the address of recipient as per the records of the supplier of service.

If address of recipient is unknown: Then place of supply shall be the location of supplier of service. {Section 12(11)(d) of IGST Act}

Before understanding above situation, we should understand the business process of Telecommunication Operator or Telecom Service Provider.  

Telecom Service Provider is work under the regulatory environment regulated by Telecommunication Regulatory Authority of India and Department of Telecom.  Department of Telecom issues the License to different bidder to operate in different circles. In India, there are 22 circles, in which licenses are given to provide the mobile service. Out of 22 circles, 12 circles cover more than one state.

Following services are provided by the Telecom Service Provider:

a) Access Services: This authorization covers collection, carriage, transmission and delivery of voice and/or non-voice messages over licensee’s network in the designated service area. Under this authorization, the licensee can also provide internet telephony, internet services including IPTV, broadband services and triple play i.e voice, video and data.  

b) Internet Services: The licensee provides internet access including IPTV, internet telephony.  

c) National Long Distance Services (NLD): The licensee has the right to carry inter circle switched bearer telecommunication traffic over its national long distance network. For basic services, the licensee can make agreement with other service providers for picking up, carriage and delivery of the traffic from different legs.  

d) International Long Distances Services (ILD): The licensee has the right to carry switched bearer telecommunication traffic over international long distance network for providing international connectivity to the network operated by the foreign carriers.  

e) Apart from the above services, separate authorizations are provided in respect of (i) Public Mobile Radio Trunking services, (ii) Global Mobile Personal Communication by Satellite services; (iii) Commercial VSAT CUG services; (iv) INSAT Mobile Satellite System – Reporting (MSS-R) services and (v) IPLC services

f) Internet Protocol television (IPTV) is the delivery of television content over computer networks based on the logical Internet Protocol (IP), rather than through traditional terrestrial, satellite, and cable television formats.

g) Apart from the above services, Telecom Service Provider assists the other Telecom Service Provider in its circle to provide the telecom and roaming service and get the consideration for such assistance.

Point XIX deals with the situation where One Telecom Service Provider uses the service of Other Telecom Service as specified in aforesaid paragraph. In that case billing address of recipient shall be considered as place of supply.

Further Point XIX also deals with the situation where Telecom Service Provider provide the service inside it business, in that case place of supply shall be location of supplier of service.

Following are the examples to understand above:

1. Reliance JIO Private Limited (Mumbai Based) enters into an agreement to Reliance Communication Limited (Mumbai Based) to provide the access of telecommunication service (roaming service) in Punjab Circle when their other states based subscribers will be in Punjab. Reliance Communication Limited held a valid license in Punjab. Let’s suppose billing month is June 2017 and bill raises on 10thJuly 2017 and transaction value is Rs. 5000000/-

Taxable Event
Location of Supplier
Location of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service in accordance to Section 7(1)(a)
Location of Reliance Communication Limited i.e. Punjab (Note I)
Location of Reliance JIO Private Limited i.e. Mumbai
Punjab in accordance to Section 12(11)(d)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th July  2017 i.e. issuance of invoice  Section 13(2) of CGST Act
10th July 2017in accordance to Section 31(2) and Section 31(5) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 5000000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

Even Reliance Communication Limited is Mumbai based company, but under the current scenario, it has to take different registration on each place from where effective supply of service start. In this case Reliance Communication is providing the effective service from its Punjab circle, hence that place shall be considered location of supplier.

Situation XX: When recharge of prepaid service is made through internet banking or other electronic mode of payment,

The place of supply shall be:  Location of the recipient of services on the record of the supplier of services.  {Second Proviso to Section 12(11) of IGST}

1. Lalit JR Sharma, a Delhi based customer of Dolphin (MTNL Mobile service), on 15thJuly 2017, uses digital mode and recharges his mobile Number through net banking amounting to Rs. 1180/-.

Taxable Event
Location of Supplier
Location of Recipient  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of voucher  Service in accordance to Section 7(1)(a)
Location of MNTL i.e. Delhi
Location of Lalit JR Sharma as per record of MTNL i.e. Delhi
Punjab in accordance to Proviso to Section 12(11)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
10th July  2017 i.e. issuance of invoice  Section 13(2) of CGST Act
10th July 2017in accordance to Section 31(2) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 1000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST and SGST

Explanation.––Where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the respective States or Union territories 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.

 Other Relevant Points:

1. Telecom operator including DTH Service provider has to take separate registration in each state from where he provide effective service.

2. In many cases, telecom operator provides the TALKTIME and internet service together. These offers should be considered as mixed supply.

Situation XX: When service is provided by the following persons to any person:

a) Banking Service Providers;

b) Other Financial Service Providers;  including

c) Stock Broking Service Providers

The place of supply shall be: Location or Recipient as per record of service provider {Section 12(12) of IGST Act}

1. Karuna Singla & Associates a Hisar Based Chartered Accountants Firm open a Bank Account in Delhi Branch of Central Bank of India on 15thJuly 2017.  Central Bank of India deducts certain bank charges of Rs. 2000/-on her current account on 20th July 2017 to provide Bank Statement, and issue an invoice on the same day. Let’s suppose GST rate is 18%.

Taxable Event
Location of Supplier
Location of Recipient  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service in accordance to Section 7(1)(a)
Location of Central Bank of India i.e. Delhi
Location of Karuna Singla & Associates i.e. Hisar- Haryana
Haryana in accordance to Section 12(12)
Inter State Supply as location of supplier and place of supply are in different states (Section 7(3) of IGST}
20th July  2017 i.e. issuance of invoice  Section 13(2) of CGST Act
20th July 2017in accordance to Section 31(2) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 2000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST @18% i.e. Rs. 180/-

Situation XXI: When service is provided by the following persons to any person:

a) Banking Service Providers;

b) Other Financial Service Providers;  including

c) Stock Broking Service Providers

The place of supply shall be: Location of service provider if location of recipient is not available as per record of supplier {Proviso to Section 12(12) of IGST Act}

2. Murli (Rajasthan Based), a student of chartered accounting course, visits Central Bank of India (Delhi based Branch) to make a Demand Draft for the fee to be deposited on 15thJuly 2017.  Bank charges Rs. 500/- to make the draft.

Taxable Event
Location of Supplier
Location of Recipient
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service in accordance to Section 7(1)(a)
Location of Central Bank of India i.e. Delhi
Unknown as per Record of Bank
Delhi in accordance to Proviso to Section 12(12)
Intra State Supply as location of supplier and place of supply are in same state (Section 8(2) of IGST}
15th July  2017 i.e. issuance of invoice  Section 13(2) of CGST Act
15th July 2017in accordance to Section 31(2) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 500/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
CGST @9% and SGST @9% i.e. Rs. 180/-

 Situation XXII: When an insurance service is provided by a person, the place of supply shall be:

a) If provides to a registered person: Location of Registered Person i.e. Registered Recipient

b) If provides to an unregistered person: Location of Recipient as per record of supplier of service.

1. JR Enterprises Limited (NOIDA based registered company)  takes the advice of Sanguine Brokering Private Limited on general insurance to safe factory from fire and through Sanguine, JR Limited takes insurance cover from Oriental Insurance Corporation Limited (having registered office) against the payment of Rs. 200000 plus GST @ 18%  on 8thMay 2017.  In return for advice, Sanguine raises the invoice Rs. 5000/- as consultancy fee on JR Enterprises Limited on 15th May 2017 and also raises the invoice of commission on Oriental Insurance Corporation Limited amounting to Rs. 6000 on 20th May 2017.

The above situation has three types of services

a) From Oriental Insurance Company Limited to JR Enterprises Limited:First party shall provide the insurance service to second party;

b) From Sanguine Brokering Private Limited to JR Enterprises Limited: First Party shall provide the consultancy service to Second Party , and place of service shall be determined in accordance to Section 12(2)(a) of IGST Act.  

c) From Sanguine Brokering Private Limited to Oriental Insurance Corporation Limited: First Party shall provide the commission  service to Second Party , and place of service shall be determined in accordance to Section 12(2)(a) of IGST Act.  

From Oriental Insurance Corporation Limited to JR Enterprises Limited

Taxable Event
Location of Supplier
Location of Recipient  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service in accordance to Section 7(1)(a)
Location of Oriental Corporation Limited i.e. Delhi
Location of JR Enterprises Limited i.e. NOIDA Uttar Pradesh
NOIDA –Uttar Pradesh in accordance to Proviso to Section 12(13) (a)
Inter State Supply as location of supplier and place of supply are in different state (Section 7(3) of IGST}
8th May 2017 i.e. issuance of invoice  Section 13(2) of CGST Act
8th May 2017in accordance to Section 31(2) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 200000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST @ 18% i.e. Rs. 36000/-

Since Insurance premium is paid on advance basis, hence Oriental Insurance Corporation Limited shall issue tax invoice before the provision of service to enable JR Enterprises Limited to take input credit of GST paid.

2. Maansi Sharma (Delhi Based) buy a life insurance policy from Life Insurance of India having registered branch office at Ghaziabad- Uttar Pradesh on 5thJanuary 2017 by paying premium amounting to Rs. 25000 per month.

Taxable Event
Location of Supplier
Location of Recipient  
Place of Supply
Nature of Supply
Time of Supply
Issuance of Invoice
Value of Supply
Type of Tax to be Levied
Sale of Service in accordance to Section 7(1)(a)
Location of Registered Branch of LIC i.e. Ghaziabad –Uttar Pradesh
Location of Maansi Sharma i.e. Delhi
Delhi in accordance to Proviso to Section 12(13)(b)
Inter State Supply as location of supplier and place of supply are in different  states (Section 7(3) of IGST}
5th January 2017 i.e. issuance of invoice  Section 13(2) of CGST Act
8th May 2017in accordance to Section 31(2) along with  invoice rule (issuing the invoice at the same time of receipt of payment)
Rs. 200000/- i.e. Transaction value in accordance to Section 15(2) of CGST Act
IGST @ 18% i.e. Rs. 36000/-

 Situation XXIII: The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be 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.

For any query kindly contact us

CA Lalit JR Sharma & Associates

Email ID: LALITJRSHARMA@GMAIL.COM

Phone No. 8920290261, 9013490513

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