Place of supply in case of transportation of passenger

PLACE OF SUPPLY IN CASE OF TRANSPORTATION OF PASSENGERS

Section 12(9) of IGST Act it says the following:

The place of supply of passenger transportation service to,

• (a) a registered person, shall be the location of such person; 
• (b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey: 

Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2). 

Explanation.

For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time  

As per the above section, if a supplier is providing transportation services to registered passengers, then the place of supply in case of registered person (Receiver of the service) shall be the location of the receiver.

For example, If A(Supplier) registered in Delhi providing transportation services gets a booking from B (Receiver) who is also having registration in Delhi, then in such case place of supply shall be DELHI and CGST & SGST shall be charged.

Also, we do not have to consider that place where he is actually embarking since he is already registered in Delhi.

Now, if the receiver of the services is not registered then the place of supply in case of unregistered person (Receiver of the service) shall be location where he starts his journey.

For Example, an unregistered person, B (Receiver of services) takes transportation services from supplier, A (supplier) having registered office in Delhi. B starts its journey from Gurugram, therefore in this case the place of supply shall be the place where an unregistered person starts his journey. Therefore, as per our example B is starting its journey from GURUGRAM, thus place of supply shall be Gurugram. In this case IGST shall be charged.

There is a proviso which is added to this Sub-section, which says that if the place of embarkation is not known (mostly in cases where services are used for future), then we shall follow Section 12(2) to determine the place of supply.

Section 12(2), of IGST Act says the following:

(2) The place of supply of services, except the services specified in sub-sections (3) to (14),

(a) made to a registered person shall be the location of such person;
(b) made to any person other than a registered person shall be,

(i) the location of the recipient where the address on record exists; and
(ii) the location of the supplier of services in other cases.

Registered person- Registered place

Unregistered person-

1. Registered place of receiver if address on record exit
2. Location of the supplier if record not exist

Further, inward and return journey shall be treated as two different journeys and separate invoices shall be issue for onward and return journey even is it is booked by same person at the same time.