MEANING
Place of supply of goods under GST defines whether the transaction will be counted as intra-state or inter-state, and accordingly levy of SGST, CGST & IGST will be determined.
The tax is paid according to the nature of the Supply. If the supply is intra-state supply, tax shall be paid as CGST+SGST and if the Supply is inter-state supply, tax shall be paid as IGST.
There is two terms which mainly determines the nature of Supply:
• Location of the Supplier.
• Location of the Place of Supply.
Location of the Supplier is from where the person is registered under GST.
Location of the Place of Supply is determined according to Sections 10, 11,12 and 13 of the IGST Acts.
DETERMINATION OF PLACE OF SUPPLY
SECTION 9 OF THE IGST ACT: SUPPLIES IN TERRITORIAL WATERS
As per the provisions contained in this Act,—
(a) where the location of the supplier is in the territorial waters, the location of such supplier; 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 or Union territory where the nearest point of the appropriate baseline is located.
SECTION 10: PLACE OF SUPPLY OF GOODS OTHER THAN SUPPLY OF GOODS IMPORTED INTO, OR EXPORTED FROM INDIA
Section 10(1)(a) – Movement of Goods
• Supply involves Movement of Goods;
• Movement by any person i.e. Supplier, Recipient or Any Other Person:
• Place of Supply of such goods shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient;
Example: Rathi Limited of Rajasthan sells 50 cell phones to Shah Traders in Gujarat. Rathi Limited delivers the product to Shah Retailers in its warehouse in Ahmedabad. POS, in this case, will be Ahmedabad and IGST will be levied as it is an Inter-State transaction.
Section 10(1)(b) – Persons stated for Bill to and for Ship to are differ from each other.
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)(c) – Supply not involve movement of goods
• Supply does not involve movement of goods;
• Whether by the Supplier or the Recipient;
POS shall be the location of such goods at the time of the delivery to the recipient;
Example: Bharat Limited registered in Maharashtra sold its pre-installed transmission tower(electric tower) located at Madhya Pradesh to Hindustan Limited registered in Delhi. In this case, the location of the supplier is Maharashtra, but a place of supply will be Madhya Pradesh. Hence, IGST will be levied.
Section 10(1)(d) – Goods supplied and assembled or installed simultaneously
Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly;
Example: Bharat Limited registered in Maharashtra opens a new office in Delhi. It purchases 10 ACs to be installed at its Delhi office from Patil electronics in Maharashtra. In this case, the location of the supplier is Maharashtra, but a place of supply will be Delhi. Hence, IGST will be levied.
Section 10(1)(e) – Goods supplied on board
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. Example: Mr. Mehta is traveling on a cruise liner from Mumbai to Goa. He purchases a book from the in-house store in the cruise liner. These books were on-boarded from Mumbai. Registered place of business of the book shop is in Mumbai. Place of supply, in this case, will be Mumbai. This is an intrastate supply, and CGST and SGST will be charged.
Section 10(2) – Power to notify place of supply if it ( place of supply ) cannot be determined
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 11 OF THE IGST ACT: PLACE OF SUPPLY OF GOODS IMPORTED INTO, OR EXPORTED FROM INDIA.
The place of supply of goods,—
(a) imported into India shall be the location of the importer;
(b) exported from India shall be the location outside India.
SECTION 12 OF THE IGST ACT: PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER AND RECIPIENT IS IN INDIA.
| Section | Particulars | Place of Supply |
| 12 (2)(a) | Supply of Services made to a Registered Person | Location of such person (Recipient) |
| 12 (2)(b) | Supply of Services made to a Unregistered Person | (i) The location of the recipient where the address on record exists; and (ii) the location of the supplier of services in other cases. |
Example – Registered office of the Recipient is in Mumbai. The recipient received consultancy in tax audit matter from the CA company of Delhi in his Delhi office. The place of supply shall be Mumbai.
| 12(3)(a) | Services directly in relation to immovable property including services provided by – Architects,Interior Decorators,Surveyors,Engineers,Other related experts andEstate AgentsEtc.. | The location at which the immovable property is located or intended to be located. |
Example – The immovable property is located in Noida. Place of supply shall always be Noida in regard of services directly related to such immovable property.
SECTION: 12 (3)(b)
Services 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.
The place of supply shall be location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located.
Example – A business man registered in Delhi visits Banglore to attend the summit in regard of his business. He stays in a Hotel. Place of supply shall be the place where the Hotel is located i.e. Banglore. Transaction will be intra-state supply because location of the Supplier i.e. Hotel owner and location of the Hotel are in same State.
SECTION: 12 (3)(c)
In case of Services 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. The place of supply shall be the location at which the immovable property is located or intended to be located.
SECTION: 12 (3)(d)
Any services ancillary to the services referred to in clauses (a), (b) and (c). POS: The location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located.
Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient.
SECTION: 12 (4)
The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery.
POS: The location where the services are actually performed.
Example – An Advertisement Company of Delhi contracts with a beauty salon firm of Delhi for dressing and beauty work upon their models in Mumbai. According to section 12 (4) the place of supply shall be where the services are provided. In this example the place of supply is Mumbai where the dressing and beauty-work done. Transaction between the Advertisement Company and the Beauty Saloon Firm is inter-state transaction because the location of the supplier and place of supply are in differ states.
SECTION: 12 (5)
Services in relation to training and performance appraisal. Place of Supply
(i) if such services made to Registered Person then Location of such person or
(ii) If such services made to the person other than registered person the location where the services are actually performed.
Example – A company registered in Delhi contracts with the person registered in Dehradun to give training to their employees in regard of operating the machine imported from the Japan. The training is provided in Dehradun in the office of the Supplier of Services. The place of supply shall be Delhi because services provided to the recipient company registered in Delhi.
SECTION: 12 (6)
Supply of 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 of Supply where the event is actually held or where the park or such other place is located.
SECTION: 12 (7)
Services provided by way of
a) organisation 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
(b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events,
Place of Supply
(i) if such services made to Registered Person then Location of such person or
(ii) If such services made to the person other than registered person the place where the event is actually held
(iii) if the event is held outside India, the place of supply shall be the location of the recipient.
SECTION: 12 (8)
Services by way of transportation of goods, including by mail or courier.
Place of Supply
(i) if such services made to Registered Person then Location of such person or
(ii) If such services made to the person other than registered person the location at which such goods are handed over for their transportation.
(iii) Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.
SECTION: 12 (9)
Supply of passenger transportation service.
Place of Supply
(i) if such services made to Registered Person then Location of such person or
(ii) If such services made to the person other than registered person the place where the passenger embarks on the conveyance for a continuous journey.
SECTION: 12 (10)
Supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle. POS: The location of the first scheduled point of departure of that conveyance for the journey.
SECTION: 12 (11)
Supply of telecommunication services including data transfer, broadcasting,cable and direct to home television services to any person.
(a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna
(b) in case of mobile connection for telecommunication and internet services provided on post-paid basis.
(c) mobile connection/ internet services on pre-payment basis through a voucher or any other means.
POS:
(a) place of supply be the location where such instrument is installed for receipt of services.
(b) place of supply be the location of billing address of the recipient of services on the record of the supplier of services
(c) place of supply be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply of such vouchers or Vouchers supplied by any person to the final subscriber, be the location where such pre-payment is received or such vouchers are sold.
(d) place of supply be the address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services.
SECTION: 12 (12)
Supply of banking and other financial services, including stock broking services to any person. POS: The location of the recipient of services on the records of the supplier of services.
SECTION: 12 (13)
Supply of insurance services
(a) to a registered person, be the location of such person;
(b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.
SECTION 13 OF THE IGST ACT – PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER OR LOCATION OF RECIPIENT IS OUTSIDE INDIA.
SECTION: 13 (2): Supply of Services except the services specified in sub-sections (3) to (13)
• Location of the Recipient of Services.
• Where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.
Example – The Delhi based professional firm renders services to the company of London by way of detailed report of feasibility of business in India. Place of Supply will be of London i.e. according to the Location of the Recipient. This will be export services subject to other conditions fulfilled in section 2 (6) of the IGST Act.
Example – The Advertisement based company of the Tripura receives services from the London firm about legal provisions in regard of Advertisement applying in London. Place of Supply will be Tripura i.e. according to the Location of the Recipient. This will be import services according section 2 (11) of the IGST Act.
SECTION: 13 (3)(a): Services supplied in respect of goods.
• Provided that when such services are provided from a remote location by way of electronic means, • The location where the services are actually performed for such goods.
• The place of supply shall be the location where goods are situated at the time of supply of services:
Example – The Banglore based IT company renders services to the London based Company from its office in Banglore to start a machine equipped with digital software. Such machine is also situated in the office of London based Company. The place of supply is London where the machine is situated.
SECTION: 13 (3)(b)
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.
Place of Supply – The location where the services are actually performed.
SECTION: 13 (4) Supply of services in relation to immovable property. Such as
- Services by experts,
- Services by estate agents,
- Accommodation services by a hotel, inn, guest house, club or campsite etc.
- Rights to use the property,
- Construction Services,
- Architects services and
- Interior Decorators etc..
Place of Supply where the immovable property is located or intended to be located.
SECTION: 13 (5)
Services 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 Place of Supply where the event is actually held.
SECTION: 13 (6)
Services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory Place of supply shall be the location in the taxable territory.
Example – The Delhi based company renders Demo Services of the newly product launched by the Company of USA in Delhi and in other countries Sri Lanka, Nepal and Bangladesh. Place of Supply will be the location of taxable territory i.e.Delhi in spite of the fact the greatest proportion of services are rendered out of India i.e. in non taxable territories.
SECTION: 13 (7)
Services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory. Place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory 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 or, in the absence of such contract or agreement, on such other basis as may be prescribed.
SECTION 13 (8)
For Following Services –
(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;
(b) intermediary services;
(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Place of Supply shall be the location of the Supplier of Services.
SECTION: 13 (9)
Services of transportation of goods, other than by way of mail or courier. Place of Supply shall be the place of destination of such goods.
SECTION: 13 (10)
Passenger transportation services. Place of Supply shall be the place where the passenger embarks on the conveyance for a continuous journey.
SECTION: 13 (11)
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 Place of Supply shall be the first scheduled point of departure of that conveyance for the journey.
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