CA Sandeep Salve

CA Sandeep Salve

In the earlier articles, I had covered Place of Supply of Goods and Place of Supply of services in India as per IGST Act, 2017 as passed by Lok Sabha on 29th March 2017.

Just to reiterate, that the provisions of place of supply of goods and services are given in Chapter V of The IGST Act. There are in all five sections under this chapter. Two sections are to determine place of supply of goods and the remaining three sections determine the place of supply of services. This article is based on section 13 which is titled as “Place of supply of services where location of supplier or location of recipient is outside India”.

Section 13 provides separate principles for determining place of supply for specified services. If services are other than specified services, then general rule has to be followed. Let’s start with the general rule which is tabulated below :

Section Nature Place of Supply
13(2) General Rule Check 1: Address available

Location of recipient of service

Check 2 : Address not available

Location of supplier of service

It is important to understand what is :

1. Location of recipient of services, and

2. Location of supplier of services

These terms are defined under section 2(14) and 2(15) respectively of the IGST Act which are as follows :

1. Location of recipient of services

“location of the recipient of services” 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;

Online GST Certification Course by TaxGuru & MSME- Click here to Join

(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;

2. Location of supplier of services

“location of the supplier of services” means,––

(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 provision of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier;

It is also important to know the definition of fixed establishment which is defined under section 2(7) which is quoted below :

“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;

The principles of place of supply of specified services when the location of supplier or location of recipient is outside India are tabulated below :

Sl. No. Section   Nature Place of Supply
1. 13(3) 1. Services supplied in respect of goods that are required to be made physically available by recipient to supplier

2. Services supplied to an individual where physical presence is required

3. Services are provided from remote location in respect of goods which are required to be made physically available by recipient to supplier

POS for 1 and 2

Location where services are actually performed

POS for 3

Location where goods are situated at the time of supply of services

2. 13(4) Services in relation to immovable property Location where immovable property is situated
3. 13(5) 1. Admission to events

2. Organizing event

3. Services ancillary to admission or organization

Place where the event is actually held
4. 13(6) Where any of the above mentioned services is supplied at more than one location including a location in the taxable territory POS will be location in taxable territory i.e. whole of India except Jammu and Kashmir
     
5. 13(7) Where any of the above mentioned services is supplied at more than one State or UT Check 1: Agreement entered

Location shall be respective State or UT in proportion to the value of services in terms of contract.

Check 2: Agreement does not exists

In absence of agreement, POS will on basis as may be prescribed.

     
6. 13(8) 1. Services supplied by banking company, financial institution, NBFC to account holders

2. Intermediary services

3. Hiring of means of transport excluding aircrafts and vessel upto a period of one month

POS will be location of supplier of services
     
7. 13(9) Transportation of goods Place of destination of goods
     
8. 13(10) Passenger transportation services Place where passenger embarks on the conveyance
     
9. 13(11) Services on board a conveyance Location of first scheduled point of departure of conveyance
     
10. 13(12) Online information and database access or retrieval services Location of recipient of services

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (4818)
Type : Articles (14552)
Tags : goods and services tax (3381) GST (2970)

2 responses to “Simplification of place of supply of services when location of supplier or location of recipient is outside india”

  1. Vijay says:

    Please enlighten on following situation.
    An garment brand provides export orders,designs,technical specifications for exports to UK.The buyer places this work to an agency in India. Agency findouts suppliers in India.Suppliers export directly to overseas buyers and collects export proceeds. The garment buyers gives commission in forex to agency. QUESTION. Whether commission from Buyer to agency is liable to GST.

    • Sunil Kumar says:

      No GST will be applicable. It will be considered as an export transaction because as per general rule, place of supply of service is Location of recipient of service and in your case location of recipient of service is out of India

Leave a Reply

Your email address will not be published. Required fields are marked *