Place of Supply of Goods and Services under GST

Q. No. 1. What is the need for the place of supply of goods and services under GST?

Ans. The basic principle of GST is that it should effectively tax the consumption of supplies at the destination or at the point of consumption. So place of supply provision determines the place i.e. whether a transaction is intra-state or inter-state. In other words, the place of Supply of Goods is required to determine whether a supply is subject to SGST plus CGST in a given State or would attract IGST if it is an inter-state supply.

If the supplier of goods or services and place of supply of goods or services are located in same State, then CGST and SGST is payable. SGST of that state is payable, when supplier and place of supply is in one state. However, if the supplier and the place of supply are located in different States, then IGST is payable.

Q. No. 2. What is the place of supply where movement of goods is involved?

Ans. As per section 7(2) of the Revised Model IGST Law, place of supply involving movement of goods shall be the location of the goods where movement of goods terminates for delivery to the recipient.

Q. No. 3. What is the place of supply where goods are delivered to a person on the direction of a third person?

Ans. As per section 7(3) of the Revised Model IGST Law, if the movement is at the instance of the third person to a recipient [by way of instruction or transfer of documents of title to goods or otherwise], the place of supply will be principal place of business of the third person [i.e. address provided in Registration Certificate].

Q. No. 4. What is the place of supply where movement of goods is not involved?

Ans. Where supply does not involve movement of goods; the place of supply will be the location of goods at the time of delivery to the recipient. Neither in the CGST Act nor in the IGST Act, the term ‘location of supplier of goods’ has been defined.

Considering that the location of supplier will be location of goods, in this type of transaction there will not be any inter-State supply since the location of the supplier and the place of supply will be in the same State.

Q. No. 5. What is the place of supply in case of assembly or installation of goods at site?

Ans. The place of supply of goods in case of assembly or installation of goods will be the place of installation or assembly.

Q. No. 6. What is the place of supply in case of goods / food products sold on aircraft?

Ans. The place of supply in case of goods taken on board for consumption in aircraft, is the place or location at which such goods are taken on board. For example, if an aircraft departs from Bangalore to Mumbai after taking onboard food for consumption on board, the place of supply will be Bangalore.

Q. No. 7. In case of ambiguity, whether State Government can give directions to determine the place of supply of goods?

Ans. No, in case of any ambiguity and the place of supply cannot be determined as provided in Sections 7(2) to 7(6) of the Revised Model IGST Law, the place of supply of goods will be determined by the Central Government based on the recommendation of the GST Council.

Q. No. 8. In case of export of goods from India, what is the location of supply of goods?

Ans. The location of supply of goods exported from India shall be the location outside India.

Q. No. 9. What is the place of supply of service in relation to an immovable property?

Ans. Section 9(4)(a) of Revised Model IGST Law provides that any service provided directly in relation to an immovable property including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or coordination of construction shall be the location at which the immovable property is situated.

Q. No. 10. What is the place of supply of accommodation services?

Ans. As per Section 9(4)(b) of the Revised Model IGST Law, the location of the hotel, inn, guesthouse, homestay, club or campsite or a houseboat or vessel, shall be the place of supply of service in relation to such accommodation service. In case, the accommodation service is provided at multiple locations situated in different States or the vessel or boat located in more than one State at a time of supply of service, then the value of the supply of service shall be treated as made in each of the States in proportion to the value for services separately collected or determined in the terms of the contract or arrangement entered. In the absence of such contract or agreement, the determination shall be on such other reasonable basis as may be prescribed.

Q. No. 11. What will be the place of supply for restaurant and catering services?

Ans. The place of supply for restaurant and catering services shall be the location where the services are actually performed. Section 9(5) of Revised Model IGST Law provides that the place of supply of service shall be the location where the services are actually performed in respect of restaurant and catering services, personal grooming, fitness, beauty treatment, health services including cosmetic and plastic surgery.

For Example, if ‘X’, a resident of Mumbai, goes to Bangalore for plastic surgery then the place of supply of plastic surgery services shall be Bangalore.

Q. No. 12. What will be the place of supply of training services?

Ans. Section 9(6) of the Revised Model IGST Law provides that when a training service is provided to a registered person, the location of such registered person shall be the place of supply of training services. In case the service is provided to a person other than a registered person, then the place of supply shall be the location where the services are actually performed.

Q. No. 13. What will be the place of supply of services for admission to sporting events?

Ans. Section 9(7) of the Revised Model IGST Law provides that the place of supply of services provided by way of admission to cultural, artistic, sporting, scientific, educational, or entertainment events or amusement park or any other place, shall be the place where the event is actually held or where the park or such other place is located.

Hence, the services in relation to admission to a sporting event shall be the location where the event is actually held.

Q. No. 14. What will be the place of supply for services in relation to organizing events?

Ans. Section 9(8) of the Revised Model IGST Law provides that services in relation to organization of events when provided to a registered person shall be the location of such person. If the service is provided to a person not registered, then the place of supply shall be the place where the event is actually held.

If the events are held in more than one State and consolidated amount is charged for supply of services relating to such event, then the place of supply of services shall be taken as being in each of the State in proportion to the value of services so provided in each State as ascertained from the terms of the contract or agreement entered in this regard. In the absence of such contract or agreement the place of supply shall be determined as may prescribed in rules.

Q. No. 15. What will be the place of supply of sponsorship services?

Ans. Assigning of sponsorship to any of the cultural, artistic, sporting, scientific, educational or entertainment event shall be the location of the registered person [i.e. the recipient of service]. If the event is organized for an unregistered person, then the assignment of sponsorship shall be the location where the event is actually held.

Q. No. 16. What will be the place of supply of services in relation to a sporting event organized/held outside India?

Ans. Section 9(8) of the Revised Model IGST Law provides that if an event is held outside India, the place of supply shall be the location of the recipient.

Example, if an IPL cricket match is played in South Africa, then the place of supply of service in relation to organizing the cricket match shall be the location of IPL limited.

Q. No. 17. What is the place of supply of services by way of transportation of goods?

Ans. Section 9(9) of the Revised Model IGST Law provides that services by way of transportation of goods provided to a registered person shall be the location of the registered person. Such services if provided to a person other than a registered person, shall be place of supply and the location at which such goods are handed over for their transportation.

Q. No. 18. What is the place of supply of services by way of transportation of goods, other than by way of mail or courier?

Ans. As per Section 10(9) of the Revised Model IGST Law, where the location of the supplier or the location of the recipient is outside India, the place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods.

Q. No. 19. What is the place of supply for services of passenger transportation?

Ans. Section 9(10) of the Revised Model IGST law provides that the place of supply of passenger transportation services to a registered person shall be the location of such registered person. If such services are provided to a person other than a registered  person, then the place of supply of passenger transportation services shall be the place where the passenger embarks (begins) on the conveyance for a continuous journey.

Q. No. 20. What is the place of supply of services provided on board a conveyance such as aircraft?

Ans. Section 9(11) provides that the place of supply of services on board a conveyance such as vessel, aircraft, train or motor vehicle will be the location of the first scheduled point of departure of that conveyance for the journey.

Q. No. 21. What is the place of supply for the telecommunication services?

Ans. Section 9(12) of the Revised Model IGST Law provides for determination of place of supply for the telecommunication services as under:

(a) In case of services by way of fixed telecommunication line, leased circuits, internet leased circuits, cable or dish antenna, the place of supply shall be the location where such installation for receipt of such services is done;

(b) In case of postpaid mobile connection services, the place of supply of telecommunication services shall be the billing address of the recipient of services on record of the service provider;

(c) In case of prepaid mobile connection services, the place of supply of telecommunication services shall be the location of the selling agent or a reseller or a distributor of SIM card or recharge voucher as per the record of supplier;

(d) In case, the vouchers are not sold by aforementioned persons, then the place of supply of services shall be the location where such prepayment is received or such vouchers are sold by any other person to the ultimate subscriber;

(e) Where address of the recipient as per records of the supplier of service is not available, the place of supply shall be the location of the supplier of service; and

(f) In case of prepaid services, if the recharge is done through Internet banking or electronic mode of payment (online), then the location of the recipient of services as found in the records of the supplier of services shall be the place of supply of such service.

Q. No. 22. What will be the place of supply of leased line services when the leased circuit is installed at more than one location/State?

Ans. As per the Explanation to Section 9(12)(d) of the Revised Model IGST Law, if leased circuit is installed in more than one State and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the States in proportion to the value of services so provided in each State as ascertained from the terms of the contract or agreement entered into in this regard. In the absence of such contract or agreement, the place of supply shall be determined as may prescribed in rules.

Q. No. 23. What will be the place of supply of banking, financial and stock broking services?

Ans. As per Section 9(13) of the Revised Model GST Law, the place of supply of banking and other financial services including stock broking services shall be the location of the recipient of service as available on the records of the supplier of services. If the location of recipient of service is not on the records of the supplier, the place of supply shall be the location of supplier of the service.

Q. No. 24. A person in Hyderabad buys shares from a broker in Kolkata on NSE [in Mumbai]. What will be the place of supply?

Ans. As per Section 9(13) of the IGST Act, the place of supply shall be the location of the recipient of services on the records of the supplier of services. So, Hyderabad shall be the place of supply.

Q. No. 25. A stockbroker in situated in Mumbai, but his clients are spread over Kolkata, Chennai, Bangalore, etc. The stockbroker purchase and sell the securities on behalf of clients located in Kolkata, Chennai, Bangalore, etc. What will be the place of supply?

Ans. As per Section 9(13) of the IGST Act, the place of supply in case of stockbroker is the place of location of the recipient of service on the record of the supplier. So, the place of supply shall be the address of the client as per the record of stockbroker. As these clients are located in Kolkata, Chennai, Bangalore, etc. the place of supply shall be the respective places of recipient of service.

Q. No. 26. A person from Kolkata goes to Kullu-Manali and takes some services from ICICI Bank in Manali. What will be the place of supply?

Ans. As per Section 9(13) of the IGST Act, if the service is linked to the account of the person, the place of supply shall be Kolkata, the location of recipient on the records of the supplier.

However, as per proviso to Section 9(13) of the IGST Act, if the service is not linked to the account of person, place of supply shall be Kullu i.e. the location of the supplier of services.

Q. No. 27. A company XYZ Ltd. has factory in Himachal Pradesh, Chennai & Karnataka and office in Mumbai. The company has registered in Mumbai under GST. The company obtains insurance for the assets located at Himachal Pradesh, Chennai, Karnataka and Mumbai from insurance company located at Delhi. What will be the place of supply?

Ans. As per Section 9(14) of Revised Model GST law, the place of supply of insurance services provided to a registered person shall be the location of such registered person. In case of insurance services provided to a person other than a registered person, the place of supply shall be location of the recipient of services on the records of the supplier of services.

In this case, the place of supply of service by the insurance company would be Mumbai i.e. the location of XYZ Ltd. where it has obtained registration. The location of asset which are insured has no relevance in determining the place of supply of service.

Q. No. 28. What is the place of supply of services where the location of the supplier or the location of the recipient is outside India?

Ans. Section 10 of the Revised Model IGST Law lays down the principles for identifying the place of supply of services in case of certain specified services. In respect of services other than the specified services the place of supply of service shall be the location of the recipient of service. Where the location of recipient of service is not known, the place of supply shall be the location of the supplier of service.

Q. No. 29. What is the place of supply in respect of goods that are required to be made physically available for providing the service?

Ans. As per Section 10(3) of the Revised Model IGST Law the place of supply of service in respect of goods that are required to be made available physically by the recipient of service to the supplier of service, shall be the location where the services are actually performed.

Q. No. 30. What is the place of supply of services provided from a remote location using electronic means in respect of goods?

Ans. As per Section 10(3) of the Revised Model IGST Law where services are provided in respect of goods from a remote location by electronic means, the place of supply shall be the location where the goods are actually located.

Q. No. 31. What is the place of supply of service in relation to an immovable property, hotel accommodation etc.?

Ans. Section 10(4) of the Revised Model IGST Law provides that the place of supply service in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located.

Q. No. 32. What will be the place of supply for services in relation to organizing  events?

Ans. As per Section 10(5) of the Revised Model IGST Law the place of supply of services supplied by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission will be the place where the event is actually held.

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