Location of supplier of services
This query is : Resolved
18 November 2022
Sea going vessel comes under agency of the assessee. Port dues etc are paid to port authorities.
Assessee is registered in State of Maharashtra
My question is when vessel comes in Port outside Maharashtra IGST will be applicable or CGST & SGST
Assessee is registered in State of Maharashtra
My question is when vessel comes in Port outside Maharashtra IGST will be applicable or CGST & SGST
09 July 2024
When a sea-going vessel registered in Maharashtra docks at a port outside Maharashtra, the applicability of IGST (Integrated Goods and Services Tax), CGST (Central Goods and Services Tax), and SGST (State Goods and Services Tax) depends on the nature of the transaction and the place of supply rules under GST.
### Port Dues and Similar Charges:
1. **Service Provided by Port Authorities:**
- Port dues, pilotage charges, berth hire charges, etc., provided by port authorities to the vessel are considered services under GST.
2. **Place of Supply Rules:**
- According to GST law, the place of supply for services related to immovable property (like port services) is determined based on the location of the immovable property (port).
3. **Applicability of GST:**
- If the port is located outside Maharashtra (say in Gujarat), the supply of services (port services) is considered an interstate supply.
- Therefore, IGST (Integrated GST) would be applicable on these services.
- IGST is a combination of CGST (collected by the Central Government) and SGST (collected by the State Government of the destination state, in this case, Gujarat).
### Practical Application:
- **Example:** If a sea-going vessel registered in Maharashtra docks at a port in Gujarat and pays port dues to the Gujarat port authorities:
- The port services provided by the Gujarat port authorities to the vessel would attract IGST.
- The Maharashtra-based assessee (the owner or agent of the vessel) would need to pay IGST on these services.
- The GST rate applicable would be as per the category of service provided by the port authorities.
### Conclusion:
In summary, when a sea-going vessel registered in Maharashtra docks at a port outside Maharashtra (such as Gujarat), the port services provided by the port authorities to the vessel will attract IGST. The Maharashtra-based assessee will be liable to pay IGST on these services as per the GST rates applicable to such services.
### Port Dues and Similar Charges:
1. **Service Provided by Port Authorities:**
- Port dues, pilotage charges, berth hire charges, etc., provided by port authorities to the vessel are considered services under GST.
2. **Place of Supply Rules:**
- According to GST law, the place of supply for services related to immovable property (like port services) is determined based on the location of the immovable property (port).
3. **Applicability of GST:**
- If the port is located outside Maharashtra (say in Gujarat), the supply of services (port services) is considered an interstate supply.
- Therefore, IGST (Integrated GST) would be applicable on these services.
- IGST is a combination of CGST (collected by the Central Government) and SGST (collected by the State Government of the destination state, in this case, Gujarat).
### Practical Application:
- **Example:** If a sea-going vessel registered in Maharashtra docks at a port in Gujarat and pays port dues to the Gujarat port authorities:
- The port services provided by the Gujarat port authorities to the vessel would attract IGST.
- The Maharashtra-based assessee (the owner or agent of the vessel) would need to pay IGST on these services.
- The GST rate applicable would be as per the category of service provided by the port authorities.
### Conclusion:
In summary, when a sea-going vessel registered in Maharashtra docks at a port outside Maharashtra (such as Gujarat), the port services provided by the port authorities to the vessel will attract IGST. The Maharashtra-based assessee will be liable to pay IGST on these services as per the GST rates applicable to such services.
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