Discover the intricacies of Place of Supply Provisions under GST. Understand the key terminologies and provisions to determine the applicable tax for your transactions.
In GST, the concept of a place of supply has been made relevant not only for the supply of services but also for the transaction of goods. In this article, we shall be discussing on provisions relating to the place of supply of goods. Which tax is to be levied (IGST or CGST and SGST/UTGST) will depend on whether a particular transaction is an Inter-state supply or Intra-state supply. Hence, every transaction will have to go through the test of provisions relating to the place of supply in order to determine which tax is to be levied.
Before discussing core provisions of the place of supply, we need to first have a look at few terminologies.
1. Inter-state supply is when “location of supplier” and “place of supply” are not in the same state or same union territory.
2. Intra-state supply is when “location of supplier” and “place of supply” are in the same state
or same union territory.
3. Location of recipient of service:
(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 residence of the recipient
4. Location of Supplier of service:
(a) where a supply is made from a place of business for 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 provisions of the supply; and
(d) in absence of such places, the location of the usual place of residence of the supplier
Place of Supply of Goods other than supply of goods imported into, or exported from India (Section 10 of the IGST Act,2017)
(A) Where the place of supply of goods can be determined
|
Section |
Nature of Supply of Goods | Place of Supply |
| 10(1)(a) | where the supply involves movement of goods, whether by the supplier or the recipient or by any other person | the location of the goods at the time at which the movement of goods terminates for delivery to the recipient |
| 10(1)(b) | 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 | |
| 10(1)(c) | where the supply does not involve movement of goods, whether by the supplier or the recipient | the location of such goods at the time of the delivery to the recipient |
| 10(1)(d) | where the goods are assembled or installed at site | the place of such installation or assembly |
| 10(1)(e) | where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle | the location at which such goods are taken on board |
(B) Where the place of supply of goods cannot be determined:
the place of supply shall be determined in such manner as may be prescribed.
|
Section |
Nature of Supply of Goods | Place of Supply |
| 10(1)(a) | where the supply involves movement of goods, whether by the supplier or the recipient or by any other person | the location of the goods at the time at which the movement of goods terminates for delivery to the recipient |
| 10(1)(b) | 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 | |
Place of Supply of goods imported into, or exported from India (Section 11 of the IGST Act,2017)
| Section | Situation | Place of Supply |
| 11(a) | The place of supply of goods imported into India | the location of the importer |
| 11(b) | The place of supply of goods exported from India | the location outside India |
Place of supply of services where location of supplier and recipient is in India. (Section 12 of the IGST Act,2017
|
Applicable Section |
Nature of
Supply of Services |
Place of Supply |
| 12(2) | All services, except the services specified in sub-section (3) to (14) made to:- | |
| (a) A registered person (i.e B2B) | The location of such registered person | |
| (b) Any person other than registered person (i.e B2C)
(i) where address of the recipient exists on record (ii) where address of the recipient does not exists on record |
(i) Location of the recipient
(ii) Location of the supplier of services The location at which the immovable property or boat or vessel, as the case may be is located or intended to be located However, If the ocation of the immovable property or boat or vessel are outside India, then location of recipient of service. |
|
| 12(3) | In relation to an immovable property or by way of accommodation in such property where-
Services- (a) directly related to an immoveable property, including services provided by architects, |
|
| (b) lodging accommodation by hotel, guest house, home stay, club or campsite, by whatever name called and including a house boat or any other vessel | ||
| (c) by way of accommodation in any immoveable property for organizing any marriage, reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property. | ||
| (d) Any services ancillary to the services in a,b,c above | ||
| Note: Where the immovable property or boar or vessel is located in more than one state or union territory, the supply of service 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 this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed. | ||
| 12(4) | Supply of service provided by restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery | Location of the place where services are actually performed |
| 12(5) | Supply of service provided by way of training and performance appraisal to
(a) a registered person (b) an un-registered person |
(a) Location of the registered person
(b) Location of the place where service is actually performed. |
| 12(6) | Supply of service provided by way of admission to a cultural, artistic, sporting, scientific, educational, or entertainment event or amusement park or any other place and services ancillary thereto. | Location of the place where the event is actually held or where the park or the place is actually situated. |
| 12(7) | Supply of services provided by way of-
(a) organizing of a cultural, sporting, scientific, and educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar event. (b) services ancillary to organizing of any one of the events or services referred to in clause (a), or assigning of sponsorship to such events |
(a) Location of the registered recipient of service. In case recipient is not registered then place where the event is actually held. In case place where event actually held is outside India then place of recipient of service. |
| Note: 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 service 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 this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed. | ||
| 12(8) | Supply of services by way of transportation of goods including by mail or courier. | Location of registered recipient. In case recipient is unregistered –Place where the goods is handed over. |
| 12(9) | Supply of passenger transportation service | Location of registered recipient. Where the recipient of service
is not registered with GST-Place where he embarked to vehicle Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provision of section 12(2) i.e. general rule. Explanation: For the purpose of this subsection, the return journey shall be treated as separate journey even if the right to passage for onward and return journey is issued at the same time |
| 12(10) | Supply of service on board a conveyance including a vessel, an air craft, a train or motor vehicle | Location of the first schedule departure of the conveyance for the journey. |
| 12(11)(a) | Supply of services by way of fixed telecommunication line, leased circuits, and internet leased circuit, cable or dish antenna. | Location where the telecommunication line, leased circuit, cable connection or Dish Antenna is installed. |
| 12(11)(b) | Supply of services by way of post-paid mobile connection and internet services | Location of billing address of recipient of service. |
| 12(11)(c) | Supply of service by way of pre-payment mobile connection, internet and DTH through voucher or any other means. | Location of selling agent, or re- seller, or distributor In case voucher is sold by any person to the final subscriber, the location where suchpre- payment is received or voucher is sold. |
| 12(11)(d) | Supply of other services related to supply of telecommunication services including data transfer, broad casting and DTH and not related with 12(11)(a) to 12(11)(c) | Address of recipient of service. if address isnot available then place of supplier. |
| 12(12) | Supply of services by bank and any other financial institution including stock broking service | Address of recipient of service. if address is not available then place of supplier. |
| 12(13) | Supply of Insurance Service | Location of recipient if it is registered otherwise address as available on the record of the supplier. |
| 12(14) | Supply of advertisement services to the Central Government, State Government or local authorities | Location of the office of the respective government and local authority. |
Place of Supply of services where location of supplier or location of recipient is outside India (Section 13 of the IGST Act,2017)
|
Applicable Section |
Nature of Supply of Services | Place of Supply |
| 13(2) | All services which are not specifically mentioned in section 13(3) to 13(13) | Location of the recipient of service where location of recipient is not available then location of supplier of service. |
| 13(3)(a) | Supply of services with respect to the goods that are required to be made physically available. | Location where the goods are physically present. |
| 13(3)(b) | Supply of services which require physical presence of recipient or agent of recipient with supplier of service | Location where the services is physically provided. |
| 13(4) | Supply of services which is directly related with immoveable property | Location of immoveable property. |
| 13(5) | Supply of services by way of admission to certain events | Location where events are actually held. |
| 13(6) | Supply of services as referred in section 13(3) to 13(5) is supplied at more than one location, including a location in the taxable territory | The location in the taxable territory |
| 13(7) | Supply of services as referred in section 13(3) to 13(5) are supplied in more than one state or union territory | The location in that state or union territory. |
| 13(8) | Supply of service by banking company, NBFC, Intermediaries, hiring of yacht for 1. | Location of service providers. |
| 13(9) | Supply of service by way of transportation of goods other than courier and mail | Destination of the goods. |
| 13(10) | Supply of passenger transportation service | Location where passenger embarks. |
| 13(11) | Supply of service on board a conveyance. | Location from where the conveyance started its journey. |
| 13(12)
13(13) |
online information and database access or retrieval services
In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances |
location of the recipient of services. Explanation:
For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following noncontradictory conditions are satisfied, namely:–– |
| (a) the location of address presented by the recipient of services through internet is in the taxable territory;
(b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory; (c) the billing address of the recipient of services is in the taxable territory; (d) the internet protocol address of the device used by the recipient of services is in the taxable territory; (e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory; (f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory. place of effective use and enjoyment of a service |
Special provision for payment of tax by a supplier of online information and database access or retrieval services. (Section 14 of the IGST Act,2017)
1) On supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services.
Provided that in the case of supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a nontaxable online recipient, an intermediary located in the non-taxable territory, who arranges or facilitates the supply of such services, shall be deemed to be the recipient of such services from the supplier of services in nontaxable territory and supplying such services to the non-taxable online recipient except when such intermediary satisfies the following conditions, namely:––
(a) the invoice or customer’s bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in nontaxable territory;
(b) the intermediary involved in the supply does not authorise the charge to the customer or take part in its charge which is that the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the non-taxable online recipient and the supplier of such services;
(c) the intermediary involved in the supply does not authorise delivery; and
(d) the general terms and conditions of the supply are not set by the intermediary involved in the supply but by the supplier of services.
2) The supplier of online information and database access or retrieval services referred to in subsection (1) shall, for payment of integrated tax, take a single registration under the Simplified Registration Scheme to be notified by the Government:
Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay integrated tax on behalf of the supplier:
Provided further that if such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax
Author Bio
Dear Ms Shubhi,
Your article on POS is good. Pl comment also on sec.13(9) which recently amended in Budget-2023 and its impact on Exporter/Importer.
Regards
S K Jain
M-9837030904