Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

POS Lies on supplier state

4789 views

Save Share

S.Reddy

CA by Qualification

42 Points Posted on 04 October 2021

In order to avail credit of input services, does POS need to be in recipient state only?

ex: A from telangana has received some repair services in Delhi, now, POS will be Delhi and cgst & sgst are charged in invoice. Now my GSTR2B is showing non availability of Input with reason, POS lies in the supplier state.

please clarify me on the input availability in this case.

Replies (4)

Quick Summary

This discussion clarifies a common GST query regarding the Place of Supply (POS) for services and its impact on Input Tax Credit (ITC). If a business in one state receives services performed in another state, the POS is generally determined by the location of service consumption or the recipient's location. However, for ITC to be available, the POS typically needs to align with the state where the recipient is registered. If the POS falls in the supplier's state and not the recipient's, ITC may be denied.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 04 October 2021

Determining The Place Of Supply Of Services

GST is destination-based tax i.e consumption tax, which means tax will be levied where goods and services are consumed and will accrue to that state. Under GST, there are three levels of Tax, IGST, CGST & SGST and based on the ‘’place of supply’’ so determined and the location of the supplier, the respective tax will be levied.

IGST is levied where the transaction is inter-state, and CGST & SGST are levied where the transaction is intra-state. For understanding the place of supply for services, the following two concepts are very important namely:

Location of the recipient of services
Location of the supplier of services

Rajendra Prasad

Employee Private

1913 Points Posted on 04 October 2021

Here only the concept is, if any services received in relation to the immovable property, the place of supply shall be the location of immovable property.
And secondly, place of supply depend upon the place of consumption, means where ever the goods or services or both are consumed shall be the place of supply.