Place of Supply

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Place of Supply

In deciding as ot whether a supply is inter state or intra state, one of the determining factor is place of supply.  Thus, a transaction of supply shall be called as interstate Supply of goods and / or services when the following conditions are met:

  • Location of supplier is in one state / Union Territory
  • Place of Supply is in another state/ Union Territory

The above understanding is shown in the following diagram:

In line, a transaction shall be called as intra state as shown below:

Certain transactions which are deemed to be Inter state Supply

  • Place of Supply of Goods / Services to or by a SEZ unit / developerSection 8 provides that the supply of goods or services to or by a Special Economic Zone developer or a Special Economic Zone unit shall always be an inter state transaction and shall be exigible to IGST.
  • Place of Supply in case of High Sea Sales / in the course of importSection 8 provides that high sea sale of goods or supply of goods in the course of import or the supply of goods imported into the territory of India till they cross the customs frontiers of India shall always be an inter state Supply and shall be exigible to IGST.

Supply made to an international tourist

Section 8 provides that supply of goods made to an international tourist shall be inter state supply.  It is important to note that the services supplied to an international tourist shall not necessarily be an inter state supply.  Internation tourist is a tourist described in Section 15 of the IGST Act, which provides that “tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes.

Zero rated supply

Section 16 deals with the concept of Zero Rated Supply.  It defines Zero rated supply as follows:

(1)      “Zero rated supply” means any of the following supplies of goods or services or both, namely:—

(a)      export of goods or services or both; or

(b)      supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.

Benefits of Zero Rated Supply

The following benefits are available to a zero rated supply:

  • Such supply is not exigible to any tax
  • credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply
  • A registered person making zero rated supply shall be eligible to claim refund

Refund to person Making Zero Rated Supply

A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:—

(a)      he may supply goods or services or both without payment of tax under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed and claim refund of unutilised input tax credit; or

(b)      he may supply goods or services or both on payment of integrated tax, subject to such conditions, safeguards and procedure as may be prescribed, and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.

Place of supply is to be determined by provisions of IGST Act, which are summarized as under:

The above provisions are detailed as under:

 

S.no. Description of Supply Goods / Services Supplier Recepient Remarks Place of Supply
1 Supply of goods which are required to be removed from location of supplier Goods In India In India Location where movement terminates
2 Supply of goods which are required to be removed from location of supplier Goods In India In India Principal place of business of such registered person
3 Supply not requiring movement of goods Goods In India In India Location of such goods at the time of the delivery to the recipient
4 Place of Supply of Goods within India in case goods are to be installed Goods In India In India Location where where the goods are assembled or installed at site
5 Goods supplied on board of conveyance Goods In India In India Place where goods have been boarded on the mode of conveyance
6 Import of Goods Goods Outside India In India Location of the importer
7 Exports of Goods Goods In India Outside India Outside India
8 Other Services Services In India In India Services Provided to Registered person Location of Service Receipient
9 Other Services Services In India In India Services Provided to un Registered person Location of Service Recepient if receipient address is on records, else Location of supplier
10 Services in Relation to Immovable Properties [Section 12(3)] Services In India In India Like Architect, Interior decorator, Surveyors, Consulting Engineers, Estate agents Place where the immovable property is located or intended to be located except when located outside India
11 Services in Relation to Immovable Properties – Accomodation [Section 12(3)] Services In India In India Like Hotel, inn, guest house, home
stay, club or campsite
Place where the immovable property is located or intended to be located except when located outside India
12 Services in Relation to Immovable Properties – Organising Events [Section 12(3)] Services In India In India Like marriage or reception or matters related thereto, official, social,
cultural, religious or business function including
Place where the immovable property is located or intended to be located except when located outside India
13 Restaurant services [Section 12(4)] Services In India In India Place where services is performed
14 Fitness Services [Section 12(4)] Services In India In India Place where services is performed
15 Catering services [Section 12(4)] Services In India In India Place where services is performed
16 Beauty treatment Services [Section 12(4)] Services In India In India Place where services is performed
17 Personal grooming Services [Section 12(4)] Services In India In India Place where services is performed
18 Health service including cosmetic and plastic surgery [Section 12(4)] Services In India In India Place where services is performed
19 Training and Performance Appraisal Services [Section 12(5)] Services In India In India When provided to a Registered receipient Location of Receipient
20 Training and Performance Appraisal Services [Section 12(5)] Services In India In India When provided to a Unregistered receipient Place where services is performed
21 Admission to an Event, Amusement park Section 12(6) Services In India In India Includes a cultural,
artistic, sporting, scientific, educational, entertainment event or amusement
park or any other place and services ancillary thereto
Place where services is performed
22 Service relating to Organising events, conference, fairs, exhibition, celebration etc [Section 12(7)] Services In India In India When provided to a Registered receipient Location of Receipient
23 Service relating to Organising events, conference, fairs, exhibition, celebration etc [Section 12(7)] Services In India In India When provided to a Unregistered receipient Place where event happened
24 Service relating to Organising events, conference, fairs, exhibition, celebration etc [Section 12(7)] Services In India In India Event held outside India Location of Receipient
25 Transportation of Goods including by mail or courier [Section 12(8)] Services In India In India When provided to a Registered receipient Location of Receipient
26 Transportation of Goods including by mail or courier [Section 12(8)] Services In India In India When provided to a Unregistered receipient Location at which goods handed over to transporter
27 Transportation of Passengers [Section 12(9)] Services In India In India Registered receipient Location of Receipient
28 Transportation of Passengers [Section 12(9)] Services In India In India Unregistered Recepient Location at which passenger embarks conveyance
29 Supply of Services on Board of Conveyance [Section 12(10)] Services In India In India Mode of Conveyance shall include a vessel,an aircraft, a train or a motor vehicle, Location of first scheduled point of departure
30 Telecommunication Services – Fixed Lines [Section 12(11)] Services In India In India Fixed Telecommunication lines, Leased Circuits, Internet Leased circuits, cable or dish antene Location where such instruments is installed
31 Telecommunication Services – Post Paid [Section 12(11)] Services In India In India Post paid mobile or internet connections Billing address of receipient
32 Telecommunication Services – Prepaid [Section 12(11)] Services In India In India Pre Paid mobile, internet or DTH through a selling agent or distributor Address of selling agent or distributor as available on records of service provider
33 Telecommunication Services – Prepaid to user[Section 12(11)] Services In India In India Pre Paid mobile, internet or DTH by any person to final subscriber Location where payment is receied or voucher os sold
34 Telecommunication Services – Other Cases [Section 12(11)] Services In India In India Other cases Address of selling agent or distributor as available on records of service provider if no adress available location of service receiver
35 Telecommunication Services – Prepaid through internet [Section 12(11)] Services In India In India Prepaid mobile, internet voucher through internet Address of receipient of service on records of provider
36 Banking & other financial services including stock broaking service [Section 12(12)] Services In India In India Address of Receiver available on records Location of receipient of service on record
37 Banking & other financial services including stock broaking service [Section 12(12)] Services In India In India Address not available on record Location of supplier of services
38 Insurance Services [Section 12(13)] Services In India In India Registered Person Location of Receipient
39 Insurance Services [Section 12(13)] Services In India In India Unregistered person Location of receipient of services on records of supplier
40 Advertisement services provided to Government [Section 12(14)] Services In India In India Location shall be proportional state wise as per agreement
41 Other Services [Section 13(2)] Services In India Outside India Location of Service Recepient if receipient address is on records, else Location of supplier
42 Services supplied in respect of goods which are required to be made
physically available by the recipient of services to the supplier of
services, or to a person acting on behalf of the supplier of services in
order to provide the services [Section 13(3)]
Services In India Outside India Location where the services are actually performed
43 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 [Section 13(3)]
Services In India Outside India Location where the services are actually performed
44 Services in Relation to Immovable Properties [Section 13(4)] Services In India Outside India Location of Immovable property
45 Services in Relation to Immovable Properties – Accomodation [Section 13(4)] Services In India Outside India Location of Immovable property
46 Services in Relation to Immovable Properties – Organising Events [Section 13(4)] Services In India Outside India Location of Immovable property
47 Admission to an Event, Amusement park Section 13(5) Services In India Outside India Place where the event is actually held
48 Service relating to Organising events, conference, fairs, exhibition, celebration etc [Section 13(5)] Services In India Outside India Place where the event is actually held
49 services supplied by a banking company, or a financial institution, or
a non-banking financial company, to account holders [Section 13(8)]
Services In India Outside India Location of the supplier of services
50 Intermediary Services [Section 13(8)] Services In India Outside India Location of the supplier of services
51 services consisting of hiring of means of transport, including yachts
but excluding aircrafts and vessels, up to a period of one month [Section 13(8)]
Services In India Outside India Location of the supplier of services
52 Services of transportation of goods, other than by way of mail or courier [Section 13(9)] Services In India Outside India Place of destination of such goods.
53 Services of passenger transportation services [Section 13(10)] Services In India Outside India Place where the passenger embarks on the conveyance for a continuous journey
54 Services provided on board a conveyance during the course of a passenger transport operation [Section 13(11)] Services In India Outside India   Services include services intended to be
wholly or substantially consumed while on board
First scheduled point of departure of that conveyance for the journey
55 Online information and database access or retrieval services [Section 13(12)] Services In India Outside India Location of the recipient of services


 

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