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June 20, 2020

Know all about Place of Supply under GST for Goods and Services

by Rubina Dsouza in Compliance Law

Know all about Place of Supply under GST for Goods and Services

Introduction

Knowing the place of supply is extremely important under GST. It is on the basis of ‘Place of Supply’ whether we can determine if GST is chargeable or not and whether IGST or CGST and SGST/UTGST is applicable. Place of Supply is covered under the IGST Act. Let us learn the same in detail.

Section 10 – Place of Supply pertaining to goods (other than imports & exports)

SituationPlace of Supply
Supply involves movement of goods directly from supplier to recipientLocation where the goods are delivered
Where goods are supplied at the direction of a 3rd personLocation of such 3rd person
When there is no movement of goods – Cases of immediate deliveryLocation where the goods are made available to the recipient
When goods are assembled/installed at siteLocation where the goods are assembled/installed
When goods are supplied on board of a conveyance(including vessel, aircraft, train, motor vehicle)Location where the goods are boarded

Let us refer to the examples below to understand the same:-

  1. Whether supply involves movement of goods

Mr A is a seller of mobile phones in Mumbai. He wants to supply the goods to Delhi. The Place of supply is Delhi (location where the movement of goods terminates)

2. When goods are supplied at the direction of the 3rd person

Supplier from Mumbai is delivering to Mr C (Jaipur) on the direction of Mr B who is in Delhi. Place of supply is Delhi (location of Mr B)

3. No movement of goods (cases of immediate delivery)

Mr A owns a mobile shop in Bangalore. He sells mobile phones over the counter at his shop only. Place of Supply will be the location where the goods are made available to the customer’s i.e. Bangalore (place where his shop is located)

4. When goods are assembled/installed at site

Mr A is a manufacturer in Jaipur. He wants to manufacture a plant in Jaipur for which he has purchased parts from Mumbai, Delhi and Jodhpur. Place of supply will be Jaipur (where the plant is being assembled)

5. When goods are supplied on board of a conveyance

A flight is flying from Mumbai to Delhi via Goa.  Food is supplied/boarded on the aircraft at Goa. Place of supply will be Goa (Location where the goods are boarded

Section 11 – Place of Supply pertaining to goods imported into India or exported from India

1.In case of Import

Place of supply shall be location of importer

Person from Kanpur is importing goods via a vessel. The vessel has reached Mumbai. Place of supply is Kanpur

2. In case of Export – Location outside India

Place of Supply of Services is covered in 2 sections:-

  1. Section 12 – Place of Supply pertaining to services, where location of supplier and recipient is in India
  2. Section 13 – Place of Supply pertaining to services, where either the location of supplier and recipient is outside India

Let us refer to the Place of Supply for specific cases under Section 12 and Section 13

SituationPlace Of Supply – Section 12Place Of Supply -Section 13
Services pertaining to immovable property (providing property on rent, services provided by interior decorators, surveyors, engineers)Place where the immovable property is situated If property is outside India, then location of recipientLocation where the immovable property is situated  
Restaurant & catering services, personal grooming & fitness services, beauty treatment, health services Performance based servicesLocation where the service is actually being performedLocation where the service is actually being performed
Training and Performance Appraisal servicesIf recipient is registered person, then location of such registered person If recipient is unregistered person, then location where service is being performedNot explicitly mentioned
Admission to an event or amusement parkPlace where the event is actually held or where the park is locatedWhere the event is actually being held  
Organisation of an eventIf recipient is registered person, location of registered person If recipient is unregistered person, location where event is being conducted If recipient is unregistered person & event is outside India, location of recipientWhere the event is actually being held  
Transportation of goods including mailIf recipient is registered person, location of registered person If recipient is unregistered person, place where goods are being handed overDestination of such goods
Passenger transportationIf recipient is registered person, location of registered person If recipient is unregistered person, place from where the passenger embarks for the journeyPlace from where the passenger embarks for the journey
Service on board a conveyanceFirst scheduled departure pointFirst scheduled departure point
Banking and other financial servicesWhere records are available with the bank, location of recipient Where records are not available with the bank, location of supplierLocation of Supplier
Insurance ServicesIf recipient is registered person, location of registered person If recipient is unregistered person, address of the recipient available with the Insurance CoNot explicitly mentioned
Telecommunication service which involves a fixed lineLocation where the equipment is fixedNot explicitly mentioned
Telecommunication Postpaid ServicesBilling address of the recipientNot explicitly mentioned
Telecommunication Prepaid ServicesPlace of sale of voucher (location of agent)Not explicitly mentioned
Supply w.r.t services where goods are to be made physically availableNot explicitly mentionedLocation where service is actually being performed If such services are being provided from remote location through e-media, location where goods are situated
Online information and database access or retrieval servicesNot explicitly mentionedLocation of the recipient

Let us refer to some example of Section 12 to understand it better:

1.Services pertaining to immovable property

Mr A is provides interior decoration services to Mr B (from Delhi) for his properties which are located in London and Mumbai.

Property Located inPlace of Supply
MumbaiMumbai (location of property)
LondonDelhi (location of recipient)

2. Performance based services

Mr A from Delhi provides beauty treatment services to Mr C in Kolkata. Place of supply will be Kolkata (location where such services are being performed)

3. Training and Performance Appraisal

Mr A provides GST training to its clients in Mumbai

RecipientPlace of Supply
XYZ Pvt Ltd (registered person located in Delhi)Delhi (location of registered person)
Mr B (unregistered person located in Goa)Mumbai (location where such service is provided)

4. Admission to an event or amusement park

Mr XYZ provides entry tickets for a music festival which is to be hold in Goa. Place of supply of such service will be Goa.

5. Organisation of event

You are an event manager and have organised a couple of events. Place of supply of these events will be as follows:-

Event Location           RecipientPlace of Supply
MumbaiPQR Pvt Ltd (registered person located in Jaipur)Jaipur (location of registered person)
DelhiMr X (unregistered person located in Bangalore)Delhi (location of event)
ParisMr Y (unregistered person located in Bangalore)Bangalore (location of recipient)

6. Transportation of goods including mail

XYZ Co provides the transportation services of goods from Jaipur to Delhi

RecipientPlace of Supply
PQR Pvt Ltd (registered person located in Mumbai)Mumbai (location of registered person)
Mr X (unregistered person from Bangalore)Jaipur (location of where the goods are being handed over)

7. Passenger transportation

XYZ Co provides the transportation services of goods from Mumbai to Pune

RecipientPlace of Supply
PQR Pvt Ltd (registered person located in Delhi)Delhi (location of registered person)
Mr X (unregistered person from Bangalore)Mumbai (location of where the passenger embarks the journey)

8. Service on board a conveyance

ABC Caterers provides dinner services on the following flights:-

Flight SchedulePlace of Supply (First scheduled departure point)
Mumbai to LondonMumbai
Delhi to Mumbai via GoaDelhi
London to DelhiLondon

9. Banking and other financial services

i. ICICI Bank provides fund transfer services to its accountholder, Mr B who is from Delhi. The records of Mr B will be available with ICICI bank. Place of supply in this case will be the location of the recipient (Delhi)

ii.Mr X (from Delhi) uses an ICICI ATM in Shimla, but account is with SBI.  In this situation the details of Mr X will not be present with ICICI Bank. Place of supply will be Shimla (location of supplier – place where the ATM is located)

10. Insurance Services

ABC Insurance Co provides health insurance services.

RecipientPlace of Supply
PQR Pvt Ltd (registered person located in Delhi)Delhi (location of registered person)
Mr X (unregistered person from Bangalore)Bangalore (address of the recipient available with the insurance co)

11. Telecommunication services (DTH services, mobile phone recharge)

Mr A is from Kolkata. He gets a job at Mumbai and gets a landline connection done at Mumbai. So, the place of supply in this case is Mumbai. However, the place of supply would be Kolkata, if Mr A would have taken a postpaid connection and provided the Billing Address of Kolkata.

Even by considering the above provisions, place of supply cannot be deduced, the law provides for a default provision in such cases which should be used while finding place of Supply

Section 12 – Place of Supply when

  1. Service provided to registered person is location of such registered person
  2. Service provided to unregistered person & location of recipient is available is location of recipient
  3. Service provided to unregistered person & location of recipient is unavailable is location of supplier

Section 13 – Place of Supply is Location of recipient. If the same is not available then location of supplier is to be considered.

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