Unravelling the Complexities of Place of Supply Regulations in the IGST Act, 2017
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
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