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Place of Supply under GST Regime

CA Milind Kale. 
on 03 September 2016

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Place of supply is a place where supply is made. Taxability of a transaction under GST regime is depends upon place of supply of goods and/or services as the basic feature of GST is destination based tax. 

Section 5 and Section 6 of Draft IGST Act, 2016 deals with provisions for determination of place of supply of goods and services respectively. The tabular presentation of provisions for ease of understanding is as under:

Section 5: Place of supply of goods

Situation

Place of supply

A] Supply involve movement of goods

 

     1. by supplier or recipient or any other person

Location of goods at which movement of goods terminates for delivery too recipient

     2. where goods are delivered by supplier to recipient or any other person on direction of a third party

Principal place of business of third party

B] Supply does not involve movement of goods

 
  1. by supplier or recipient or any other person

Location of goods at the time of delivery to the recipient

C] Goods are assembled/installed at site

Location of site

D] Where goods are supplied on board or conveyance

Location at which goods are taken on Board

E] Place of supply cannot be determined by (A) to (D)

Determined by law made by Parliament on recommendations of GST Council

Section 6: Place of supply of services

A] GENERAL RULES

B] SPECIAL CASES

Situation

Place of supply

A] Services in relation to immovable property

 

1. By architects, interior decorators, surveyors, engineers, estate agents, rights to use immovable property

Location at which the immovable property
or boat or vessel is located

2. By way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, house boat, vessel

3. By way of accommodation in any immovable property for organizing any marriage, reception, official, social, cultural, religious, business or other function and service w.r.t. such functions at such property

4. Any service ancillary to above services

NOTE: If the immovable property or boat or vessel is located in more than one state then proportionate value of supply of services made to each state shall be determined as per contract or agreement entered into and in absence of such contract or agreement, on other reasonable basis as may be prescribed.

B] Restaurant & catering services, personal grooming, fitness beauty treatment, health service including cosmetic & plastic surgery

Location where such services are actually performed

C] Services in relation to training & performance appraisal provided to

 

      1. Registered person

Location of such person

      2. Other Person

Location where services actually performed

D] Service by way of admission to a cultural, artistic, sporting, scientific, educational, or entertainment event or amusement park or any other place and services ancillary thereof

Location where the event is actually held or where the park or such other place is located

E] Service by way of organizing a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar events and service ancillary thereof provided to

 

      1.Registered Person

Location of such person

      2. Other Person

Location where the event is actually held

NOTE: If the event is held in more than one state and a consolidated amount is charged then proportionate value of supply of services made to each state shall be determined as per contract or agreement entered into and in absence of such contract or agreement, on other reasonable basis as may be prescribed.

F] Services by way of transportation of goods including by courier or mail provided to

 

      1. Registered Person

Location of such person

      2. Other Person

Location at which such goods are handed over for such transportation

G] Service by way of transportation of passengers to

 

      1. Registered person

Location of such person

      2. Other Person

Location of embarkation of passenger on the conveyance for a continuous journey   

NOTE:

1. In case where right to passage is given for future use and the point of embarkation is not known, the place of supply shall be determined as per GENERAL RULES

2. For the purpose of this, return journey  shall be treated as separate journey even of right to passage for outward & return is given at the same time

H]  Service on board conveyance such as vessel, aircraft, train or motor vehicle

Location of first scheduled point of departure of that conveyance for the journey

I] Telecommunication services including data transfer, broadcasting, cable and DTH television service to any person

 

1. Service by way of fixed telecommunication line, leased circuits, internet leased circuit, cable, or dish antenna

Location where such fixed telecommunication line, leased circuits, internet leased circuit, cable, or dish antenna is installed

2. In case of mobile connection for telecommunication and internet services provided on post paid basis

The location of billing address of the recipient in records of the supplier

      3. In case of mobile connection for telecommunication and internet services provided on pre-payment  basis through vouchers or other means

Location where such prepayment is received or vouchers are sold

NOTE: If prepaid service is availed or recharge is made through internet banking or other electronic mode then the location of the recipient of services in records of supplier shall be place of supply of service.

J] Banking and other financial services including stock broking service to any person

Location of service recipient in the records of supplier of service

NOTE: If the service is not linked to the account of service recipient then the place of supply shall be the place of supplier of service

K] Insurance Service provided to

 

      1. Registered person

Location of such person

      2. Other person

Location of service recipient in the records of supplier of service

L] Advertisement services to the Central Government, a State Government,  a statutory body or a local authority meant fir identifiable states

State for which it is identifiable

NOTE: Value of such supplies specific to each state shall be determined in accordance with proportionate amount attributed to service provided by way of dissemination (spreading of something) in respective state as per terms of contract or agreement and in absence of such contract or agreement on such other reasonable basis as may be prescribed

The author can also be reached at milindkale@mkca.co.in


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