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PLACE OF SUPPLY (SUMMARISED)
Place of Supply is important to determine: –
-Whether the supply is Interstate or Intrastate.
-Resulting to which, Whether SGST/UTGST plus CGST is leviable or IGST is leviable.
If inter state transaction is wrongly treated inter-state or vice-versa and tax paid accordingly, then it can be rectified. However, procedural requirements increase and working capital will get blocked. Therefore, determining Place of supply is of paramount importance.
GOODS: –
Place of Supply of GOODS (Within India)
(Section 10 of IGST Act):-
| Section | Transaction | Place of Supply | Example |
| 10(1)(a) | When supply involves movement of goods | Where movement of goods terminates for delivery of recipient. | Mika of Punjab supplies television to Honey of Delhi then POS is Delhi. |
| 10(1)(b) | Bill-to-Ship-to Transaction: –
When goods are delivered by supplier to recipient or any other person on direction of third person, whether acting as an agent or otherwise. |
Principal Place of Business of Such Third person. | If Mr. X of Haryana instruct Mr. Y of MP to send goods to Mr. Z of Delhi, the POS is Haryana (Mr. X’s Location) |
| 10(1)(c) | Where supply does not involve movement of goods.
(Thumb rule) |
Location of such goods at the time of delivery of recipient | If Kailash buys pre-furnished office from Kashi, then POS for such pre-installed furniture and fixture is that office. |
| 10(1)(d) | Where goods are assembled or installed at site | Place of Such installation or assembly takes place. | Zenia of Maharashtra gives contract to Zeeshan of Andra Pradesh to install goods at Kerala, then POS is Kerala. |
| 10(1)(e) | Where the goods are supplied on Board a conveyance including vessel, aircraft, train or motor vehicle | Location where such goods are taken on board | Amitabh takes goods on board in Assam- Gujrat train to sell them in train journey, then POS is Assam where goods are taken on board and not the places where he actually sold them. |
| 10(2) | Where POS of goods cannot be determined | POS shall be determined in a manner as may be prescribed | As may be prescribed |
Place of Supply of GOODS (Imported into or Exported from India)
(Section 11 of IGST Act): –
| Section | Transaction | Place of Supply | Example |
| 11(a) | Import | Location of Importer | S (India) imported goods from China, POS is India |
| 11(b) | Export | Place (Country) where goods are exported | P(India) exported goods to T(Pakistan), POS is Pakistan. |
SERVICES: –
Place of Supply of SERVICES (Within India)
(Section 12 of IGST Act):-
| Section | Transaction | Place of Supply | ||||||||||
| 12(1) | This section applies to supply of services where location of Supplier and Place of supply of service is within India | |||||||||||
| 12(2) | POS of services except services mentioned in Sub-clause (3) to (14) | |||||||||||
| (a) | Made to a registered person | Location of such person | ||||||||||
| (b) | Made to any other than registered person: – | |||||||||||
| (b)(i) | Address exists on record of Supplier | Location of recipient as per records | ||||||||||
| (b)(ii) | In any other case | Location of supplier | ||||||||||
| 12(3) | (a) | In relation to immovable property including work of architect, interior decorators, surveyors, engineers and other related experts or estate agents, grant of rights to use immovable property or use of it for some construction work | Location where such immovable property or boat or vessel is located or intended to be located.
{Provided that if location of immovable property or boat or vessel is located or intended to be located outside India, POS shall be location of recipient.} (Explanation: – Immovable property, or boat or vessel located in more than one state or union territory: 1) In proportion of value of service provided in that state or UT, or, 2) As mentioned in the agreement, or, 3) In absence of agreement, on such basis as may be prescribed. |
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| (b) | Lodging accommodation by way of hotel, inn, guest house, home stay, club including house boat or vessel | |||||||||||
| (c) | Accommodation in any immovable property for organizing any marriage etc., or social, cultural, religious or business event including services provided in such function | |||||||||||
| (d) | Any ancillary services referred to in clause (a), (b) or (c) | |||||||||||
| 12(4) | Restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery | Location where service is actually performed. | ||||||||||
| 12(5) | Place of supply of services in relation to training and performance appraisal TO | |||||||||||
| (a) | A Registered person | Location of such person | ||||||||||
| (b) | Any other person | Where service is actually performed | ||||||||||
| 12(6) | Admission to cultural, artistic, sporting, scientific, educational, entertainment, event or amusement park, or any event ancillary there to. | – Where Event is held, or,
– Where park is actually located |
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| 12(7) | (a) | Organization or cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to conference, fair, exhibition, celebration or similar events, or, | ||||||||||
| (b) | Service ancillary to organization of any of the events | |||||||||||
| (i) | To a registered person | Location of such person | ||||||||||
| (ii) | To any other person | Where event is actually held,
and if event is held outside India, the place of supply shall be location of recipient. |
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| 12(8) | The Place of supply of services by way of transportation of goods, including mail or courier to,- | |||||||||||
| (a) | A registered person | Shall be location of such person | ||||||||||
| (b) | Any other person | Location where such goods are handed over for transportation. | ||||||||||
| Provided where destination of goods is outside India, the POS shall be destination of such goods (i.e. outside India) | ||||||||||||
| 12(9) | The place of supply of passenger transport service to:- | |||||||||||
| (a) | A registered person | Location of such person | ||||||||||
| (b) | Any other person | Where passenger embarks on conveyance for a continuous journey. | ||||||||||
| 12(10) | Supply of services on board a conveyance including vessel, air craft, train or motor vehicle | Location of 1st schedule point of departure of conveyance. | ||||||||||
| 12(11) | The place of supply of telecommunication service including data transfer broadcasting, cable and DTH television services: | |||||||||||
| (a) | Fixed telecommunication line, leased circuit, cable or dish antenna | Location where such line is installed | ||||||||||
| (b) | Post-paid mobile or internet connections | Address of recipient in records of service provider. | ||||||||||
| (c) | Prepaid DTH or internet connection | |||||||||||
| (i)By a selling agent or distributor | Location of such agent or distributor. | |||||||||||
| (ii)By any other person | Place where such prepayment is received or voucher is sold. | |||||||||||
| (d) | In any other case, address of recipient in records of supplier, and where no record available, location of supplier of service. | |||||||||||
| 12(12) | Banking, Financial or stock broking Services | POS is address of recipient in records of service provider, location of supplier) | ||||||||||
| 12(13) | Insurance Services | |||||||||||
| (a) | To a registered person | Location of such person | ||||||||||
| (b) | Any other person | Address of Service recipient of services on record of supplier. | ||||||||||
| 12(14) | Place of Supply of advertisement services to Central Government, State Government, Statutory body or Local Authority | |||||||||||
| If proportion mentioned in agreement | In such proportion | |||||||||||
| In any other case | As may be prescribed | |||||||||||
Place of Supply of SERVICES (Location of Service Provider or Service Recipient is outside India)
(Section 13 of IGST Act): –
| Section | Transaction | Place of Supply | |||
| 13(1) | This section applies to supply of services where location of Supplier of service or Location of recipient of service is outside India. | ||||
| 13(2) | POS of services except services mentioned in Sub-clause (3) to (14) | ||||
| (a) | Normally | Location of recipient of service | |||
| (b) | If Location of recipient is not available | Location of supplier of service | |||
| 13(3) | (a) | Goods which are required to be actually made available by recipient of service.
(Example: PC repair) |
Location where service is actually performed | ||
| If service provided at remote location by electronic means, then the POS
will be location of goods at the time of supply of services. |
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| (b) | Where the presence of person is required to provide the service to him by supplier
(Example: Hair dresser) |
Location where service is actually performed | |||
| 13(4) | Service in relation to immovable property (Thumb rule) | Location where immovable property is located or situated | |||
| 13(5) | Admission to cultural, artistic, sporting, scientific, educational, entertainment, event or amusement park, or any event ancillary there to. | Where Event is held | |||
| 13(6) | If Services mentioned in sub section (3) or (4) or (5) is supplied at various location where one location is a located in Taxable territory | POS is taxable territory | |||
| 13(7) | Where services are supplied to more than 1 state or UT | POS is each state or UT in proportion of the agreement entered into, or on the basis as may be prescribed. | |||
| 13(8) | (a) | Service by banking co, Financial institution or NBFC, | Location of Supplier of services | ||
| (b) | Intermediary Services, | ||||
| (c) | Services consisting of hiring of means of transport, including Yatch but excluding aircraft and vessel upto the period of one month | ||||
| 13(9) | Goods transport service other than by mail or courier | Place of destination of such goods | |||
| 13(10) | Passenger Transport service | Place where passenger embarks for a continuous journey | |||
| 13(11) | Supply of services on board a conveyance | First scheduled point of departure of that conveyance of journey | |||
| 13(12) | Place of supply of Online Information or database access or retrieval services (OIDAR) | Location of recipient of service | |||
| 13(13) | In order to prevent double taxation or non-taxation, govt has power to notify any description of service | Where place of supply shall be place of effective use or enjoyment of service. | |||
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Author Bio
Madam,
A person located in London (UK) places order for supply of certain goods with a supplier located at Mumbai and directs directs the supplier to deliver goods to a person located at Delhi. As per section 10(1)(b) place of supply should be London. In this case goods neither will be exported nor imported. My problem is about the nature of the supply.
I am not a businessman. I am also not a professional. I am a retired Member Trivial, Commercial Taxes. You can say that it is my hobby to read indirect tax laws. I feel that place of supply has wrongly been used for defining intra-State & inter-State supply of goods. I have also written certain articles on GST laws. Said articles have been published on tax guru.in website. My name is Keshav Dayal. Email is: [email protected]
With my regards.