Introduction
The concept of “Place of Supply” is pivotal in the Goods and Services Tax (GST) regime as it determines the jurisdiction under which a particular transaction is taxable. Understanding the place of supply is crucial for correctly levying and collecting GST on the supply of goods and services, especially in cases involving interstate or international transactions.
Finding out the place of supply of a transaction is critical for determining the nature of supply under Section 7, 8 and 9 of IGST Act, 2017 (i.e. if the transaction is an interstate supply or an intra state supply) which we are well aware of.
Section 10 of IGST Act 2017 –
Place of supply of goods other than supply of goods imported into, or exported from India.
This section deals with the place of supply of goods other than supply of goods imported into, or exported from India. This section outlines the rules for determining the place where the supply of goods is deemed to have occurred for the purpose of levying IGST
Sr no. | Nature of Supply | Place of Supply |
1. | Where the supply involves the movement of goods | Location of the goods where the movement of goods terminates for delivery |
2. | Where the goods delivered to the recipient or any person on the direction of the third person by way of transfer of title or otherwise | Principal place of business of such third person |
3. | Where there is no movement of goods either by supplier or recipient | Location of such goods at the time of delivery to the recipient |
4. | Where the goods assembled or installed | Place where goods assembled or installed |
5. | Where the goods are supplied on-board a conveyance like a vessel, aircraft, train or motor and vehicle | Place where such goods are taken on-board the conveyance |
6. | Where the place of supply to be determined in the of goods cannot be prescribed manner | To be determined in the prescribed manner by Government |
Section 11 of IGST Act 2017 –
Place of supply of goods imported into, or exported from India
Sr.no | Nature of Supply of goods | Place of Supply |
1. | Import | Location of importer |
2. | Export | Location outside India |
Section 12 of IGST Act 2017-
Place of supply of services where location of supplier and recipient is in India.
- Applicability:
- Section 12(1) specifies that the provisions of this section apply to determine the place of supply of goods, excluding certain specific situations like supply of imported/exported goods and supply to individual consumers.
- General Rule (Section 12(2)):
- The default rule for determining the place of supply of services is provided in Section 12(2). According to this rule, the place of supply of services, other than those covered under specific rules, is the location of the recipient of services.
- Exceptions:
- Certain services have specific rules for determining the place of supply. For example, services related to immovable property, services provided in respect of goods that are required to be made physically available, etc., have their own rules outlined in subsequent subsections of Section 12.
- Specific Situations:
- Subsequent subsections of Section 12 provide rules for specific situations where the general rule may not apply. These include services like transportation services, services related to events and performances, services provided at a fixed establishment, etc.
- Explanation of Place of Supply in Specific Situations:
- Each subsection of Section 12 provides an explanation of the place of supply in 13 specific For instance, if the services are provided in respect of goods that are required to be made physically available, the place of supply could be the location where the services are performed, or where the goods are situated at the time of the performance of services, etc.
Section 13 of IGST Act 2017-
Place of supply of services where location of supplier or location of recipient is outside India
There are 9 specified services for which the place of supply is separately mentioned under this section.
- Apart from these 9 services the general rule is:
Default provisions for cross border supply of service other than nine specified services – Section 13 (2) | ||
Sr. no | Description of supply | Place of supply |
1. | Any | Location of the recipient of service Location of the supplier of service, if location of recipient is not available |
- Place of Supply of service under Section 13 (13):Top of Form
Sr. no | Services notified | Place of supply |
1. | Specified R&D services related to pharmaceutical sector supplied by person in taxable territory to non-taxable territory | Location of recipient of services subject to fulfilment of specified conditions |
2. | B2B repair, maintenance services of aircrafts, engines | Location of Recipient of service |
3. | B2B MRO services of ships and other vessels, engines | Location of Recipient of service |
Below is the table for Specified services under section 12 and 13:
Sr. No | Nature of Service | As per Section 12 | As per Section 13 |
1. | Immovable property and related services including accommodation | Location where Immovable property is situated If outside India – Location of recipient | Location where immovable property is situated
|
2. | If located in more than one state | In proportion to the value of services provided in each state | Not Applicable |
3. | Restaurant, fitness, beauty treatment, etc | Place where service performed | Refer default provisions u/s 13(2) i.e. Location of Recipient |
4. | Training and Self-improvement services | B2B- location of registered person B2C- Where service provided | Refer default provisions u/s 13(2) i.e. Location of Recipient |
5. | Entry to event or park or an event | Place where event is actually held or the Location of event | Place where event is actually held or the Location of event |
6. | Transportation of goods including mails and couriers | Location of registered person (B2B) or where goods handed (B2C) | Refer default provisions u/s 13(2) i.e. Location of Recipient |
7. | Passenger transportation | Location of registered person (B2B) or where passenger embarks (B2C) | Place where passenger embarks for a continuous Journey |
8. | Services on board a conveyance | First scheduled point of departure | First Scheduled point of departure |
9. | Financial services | Location of the recipient and if not available then of supplier | Refer default provisions u/s 13(2) i.e. Location of Recipient |
10. | Insurance services | Location of registered person (B2B) or Recipient of services (B2C) | Refer default provisions u/s 13(2) i.e. Location of Recipient |
11. | Advertisement services to government | Where adv. Is displayed and in case of multiple states, in proportionate value | Refer default provisions u/s 13(2) i.e. Location of Recipient |
12. | Telecommunication Services | Fixed Line of services- Location of such fixed equipment Mobile/Internet services- Location of billing address Prepaid services- Through selling agent- Location of such Agent Any person to final subscriber- Location where pre payment is collected E-payment – Location of recipient
Other cases- Location of the recipient and if not available then of supplier | Refer default provisions u/s 13(2) i.e. Location of Recipient |
| If leased circuit is installed in multiple states | In proportion to the value of services provided | Refer default provisions u/s 13(2) i.e. Location of Recipient |
13. | Such services for which goods are to be made physically present | Refer default provisions u/s 13(2) i.e. Location of Recipient | Where Services are actually performed |
| Services supplied from remote location with electronic means | Refer default provisions u/s 13(2) i.e. Location of Recipient | Where goods situated when services are supplied |
14. | Services which require physical presence of the recipient or any other person on his behalf | Refer default provisions u/s 13(2) i.e. Location of Recipient | Where Services are actually performed |
15. | Services supplied by a banking company, NBFC or similar to accounts holders, intermediary services, hiring of means of transport | Refer default provisions u/s 13(2) i.e. Location of Recipient | Place of supplier of services |
16. | Online information or retrieval services | Refer default provisions u/s 13(2) i.e. Location of Recipient | Location of recipient of service |
Authors:
CA Prashant Taparia
Partner | Email: prashant.taparia@masd.co.in | LinkedIn Profile
Vaishvi Parekh
Associate Consultant | Email: vaishvi.parekh@masd.co.in | LinkedIn Profile