Provisions Relating to Place of Supply of SERVICES

Case 1: if the location of supplier of services and also location of recipient of supply service is in India – Section 12 of IGST Act

General Situation (all situations except specific situations):

1. If supply is made to a registered person, then the place of supply shall be the location of such registered person, i.e., recipient

2. If supply is made to non-registered person, then place of supply shall be

  1. Location of recipient if his address is in records, Otherwise
  2. Location of supplier of service

Specific Situations

Sr. No. Situation Place of Supply
1 Supply directly in relation to immovable property

e.g. service by an architect, surveyor, engineer, property agents, renting, leasing, construction work, renovation etc.

Location of such immovable property (present or future), if it is in India, otherwise location of recipient of service
2 Service by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel Location of such property or house boat or vessel (present or future), if it is India, otherwise location of recipient of service
3 Service by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property

e.g. parties and services in relation to parties like singing, bar service, catering etc.

Location of such immovable property (present or future), if it is in India, otherwise location of recipient of service
NOTE: Where the immovable property or boat or vessel is located in more than one State or UT, the supply of services shall be treated as made in each of the respective States or UT, in proportion to the value for services separately collected or determined in the contract
4 restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery Location where these services are actually performed
5 services in relation to training and performance appraisal Location of recipient if recipient is registered, otherwise location where services are actually performed
6 services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto place where the event is actually held or where the park or such other place is located
7 Services by way of (i) organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events OR (ii) services ancillary to organization of any of the event or service referred above OR (iii) assigning of sponsorship to such events Location of recipient, if recipient is registered.

If recipient is not registered, then place of supply shall be the place where the event is actually held. However, if event is held outside India, then it will be location of recipient

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 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
8 Transportation of Goods, including by way of mail or courier Location of recipient, if recipient is a registered person

In case of non-registered recipient, location where goods are handed over for the transportation i.e., location of transport origination

9 Passenger transportation service

e.g. Train, Bus, Flight etc.

If service is provided to a registered person, then location of the recipient.

If service is provided to a non-registered person, then location from where the passenger embarks (go on board) on the conveyance for a continuous journey*

However, if right to passage is given for a future date and place of embarkation is not known at the time of giving right to passage, then place of service will be location of recipient if his address is there on records, otherwise place of supply will be location of service provider.

* Return journey shall be treated as a separate journey, even if right to passage for onwards and return journey is issued at the same time

10 Supply on board a conveyance including a vessel, an aircraft, a train or a motor vehicle Location of first scheduled point of departure of that conveyance for the journey
Analysis: Suppose Mr. A takes a flight from Delhi to Goa via Mumbai. There is a stopover of say 1 hour at the Mumbai airport. Now, Mr. A uses the wifi service while in the aircraft from Delhi to Mumbai and then takes SPA service at Mumbai Airport during the stopover. Now as per the above clause, place of service of wifi service would be first point of scheduled departure for the flight, i.e., Delhi and also for the SPA services, it would be first point of scheduled departure, i.e., Delhi not Mumbai
11 Telecommunication service including data transfer, broadcasting, cable and direct to home (DTH) service to any person
a. Service by way of fixed telecommunication line, leased circuits, internet leased circuits, cable or dish antenna Place where the telecommunication line, leased circuit or cable connection or dish antenna is installed
b. Mobile connection for telecommunication and internet service provided on post-paid basis Location of billing address of recipient on record of supplier of service
c. Mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means Through a selling agent or re-seller or a distributor of SIM card or voucher, location of such selling agent or re-selling agent or distributor.

By any person to final subscriber, then the location where such pre-payment is received or such vouchers are sold

d. In other cases Location of recipient on record of supplier.

In case of absence of such record, location of supplier of service.

NOTE 1: In the above cases, if recipient’s address is not available on records, then place of supply of telecommunication service shall be the location of supplier of service.

NOTE 2: If pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, then the place of supply of service shall be the location of recipient of service on record of supplier of service.

12 Banking and other financial services including stock broking services to any person Location of recipient on records of supplier of service.

In case recipient’s address is missing on records of supplier, then place of supply of service shall be the location of the supplier of the service.

13 Insurance Service In case of registered recipient, location of the recipient.

In case of non-registered recipient, location of recipient’s address on record of supplier of service.

14 Advertisement service to central government or state government or a statutory body or a local authority meant for the states or UTs identified in the contract or agreement Place of such state or UTs.

Value shall be in proportion to the amount attributable to service provided by way of dissemination in the respective state or UT.

Case 2: if either the location of supplier of services or the location of recipient of service is outside India – Section 13 of IGST Act

General Situation (all situation except the Specific Situations)

1. Place of supply of service shall be the location of the recipient of service.

2. However, if the location of recipient is not available in the ordinary course of business, then place of supply shall be the location of the supplier of service.

Specific Situations

Sr. No. Situation Place of Supply
1 Service in relation to goods which are required to be made physically available by the recipient of service to the supplier of service of any other person acting on behalf of supplier of service in order to provide the service.

Analysis: these are the services performed on someone else’s goods, e.g., Job Work services

Place where the service is actually being performed.

NOTE 1: if these services are performed from a remote location by way of an electronic mean, then place of supply shall be the location where goods are situated.

NOTE 2: this clause will not apply for services supplied in respect of goods which are temporarily imported into India for repairs and are exported back without being put to use for any other purpose in India.

2 services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services

e.g. Hair Cutting Service by a Saloon

Place where the service is actually being performed.
3 Supply of service in relation to immovable property including services by experts and estate agents;

Supply of accommodation by a hotel, inn, guest house, club or campsite by whatever name called;

Grant of right to use immovable property (renting or leasing);

Construction Service

Location where such immovable property is located or intended to be located
4 Service supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation Location where such event is actually held
NOTE 1: if any of the above 4 services are provided at more than one location and one of those locations is in taxable territory, then that service will be assumed to have been supplied in the taxable territory.

NOTE 2: if the above services are provided in more than one states or UTs, then the place of supply of such services shall be taken as being in each of the respective States or UT and the value of such supplies specific to each State or UT shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard.

5 Services by a banking company, financial institution or NBFC to its account holders

Intermediary services

services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month

Location of supplier of services
6 Transportation of goods, other than by way of mail or courier Destination of such goods
7 Transportation of passenger Place where the passenger embarks on the conveyance for a continuous journey
8 Services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board First scheduled point of departure of that conveyance for the journey
9 Online information and database access or retrieval services Location of recipient of service
NOTE: Person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non- contradictory 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

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Qualification: CA in Practice
Company: Aggarwal Sumit And Associates
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Tags : goods and services tax (2854) GST (2440)

One response to “Place of Supply of Services under GST”

  1. halaswamy k m says:

    Dear SIr

    We are sending some person to abroad to do some service like construction ( laying work) he is raised bill in india to india sender will raise to to abroad company.
    that layer is applicable to serveice tax or exempt because service done in abroad

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