CHAPTER 15

 

Place of supply of goods and services within India

 

Basic Principles

  1. GST is a destination/consumption based tax. Tax is finally payable where goods and services are consumed.
  2. Supply of goods imported into the territory of India, till they cross the customs frontiers of India shall be treated as inter State trade or commerce. IGST will be payable at the time of import of goods from customs.
  3. Supply of services imported shall also be treated as inter State trade. IGST will be payable, mostly under reverse charge.
  4. Export of goods and services, from supplier located in India to consumer outside India is also inter State trade or commerce and therefore IGST.
  5. Supply of goods/services to or by an SEZ developer or an SEZ unit is inter State trade or commerce and therefore IGST.
  6. Area upto 12 nautical miles belong to State/UT as far as GST is concerned. Notwithstanding anything contained in the IGST Act,
    Where the location of the supplier is in the territorial waters, the location of such supplier; or
    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 coastal State or UT where the nearest point of the appropriate baseline is located.
    Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate base line is located.

 

Place of supply of goods if supply is within India

  1. Where the supply involves movement of goods whether by supplier, recipient or any other person, place of supply is the location of the goods at the time at which movement of goods terminates for delivery to the recipient.
  2. 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 agent or otherwise, place of supply shall be the principal place of business of such third person.
  3. Where the supply does not involve movement of goods, whether by supplier or recipient, the place of supply shall be the location of the goods at the time of delivery to the recipient.
  4. Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly.
  5. 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.
  6. Where the place of supply of goods cannot be determined in aforesaid terms, the same shall be determined in such manner as may be prescribed.

 

Place of supply of service within India in normal situations

  1. Place of supply of service in cases directly relating to immovable property or lodging in boat or vessel within India – place of supply shall be the location at which the immovable property or boat or vessel is located or intended to be located.
  2. 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. Thus, even if immovable property is located outside India, if the location of the service recipient is in India, IGST will be payable.
  3. Place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed.
  4. Place of supply in relation to training and performance appraisal to – (a) registered person – location of such person, (b) other than registered person – location where the services are actually performed.
  5. Place of service provided by way of admission to cultural, artistic, sporting, scientific, educational, entertainment event, amusement park, etc and services ancillary thereto, shall be the place where the event is actually held or where the park or other such place is located.
  6. Organisation of cultural, artistic, sporting, scientific, educational, entertainment event, amusement park, etc., (a) provided to registered person – location of such person, (b) other than registered person – where event is actually held, (c) if event is held outside India – location of service recipient.
  7. Place of supply of services by way of transportation of goods including by mail or courier to (a) registered person – location of such person, (b) unregistered – location at which goods are handed over for their transportation.
  8. Place of supply of passenger transportation to (a)registered person – location of such person, (b) unregistered – place where passenger embarks on the conveyance for a continuous journey.
  9. Service on board a conveyance originating from India – place of supply of services on board a conveyance including vessel, aircraft, train or motor vehicle shall be the location of the first scheduled point of departure of that conveyance for the journey.
  10. Telecommunication service, date transfer, broadcasting, DTH within India –
    In case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, place of supply is where such line/circuits are installed for receipt of services
    In case of mobile connection for telecommunication/internet services provided on post-paid basis, place of supply is the billing address of the recipient of services on record of the supplier of services
    In case of prepaid services, place of supply is address of the selling agent/re-seller/distributor as per the record of the supplier or where the pre-payment is received or vouchers are sold.
    In any other case, the place of supply is the address of the recipient where available or the location of the supplier of service where recipient records are not available.
  11. Banking and other financial services within India – including stock broking, the place of supply shall be the location of the recipient of services on the records of the supplier or, where the location of recipient is not on record, the location of supplier of services.
  12. Insurance service within India – the place of supply shall be as follows:
    To a registered person – location of such person
    To an unregistered person – location of the recipient of service on the records of the supplier.
  13. Residuary services – in case of services other than those mentioned, the place of supply shall be as follows:
    To a registered person – location of service recipient
    To an unregistered person – location of the recipient of service where the records of the recipient are available or the location of the supplier of services in other cases.
  14. If both the supplier and the recipient are in India, GST may be payable even if service is provided outside India, if the service falls under the residual category. For example, tour operator in India providing service to Indian tourist outside India will be liable to pay GST.