CBIC changes the place of supply for B2B MRO services in case of the shipping industry, to the location of the recipient

Last updated: 08 June 2021

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The Central Board of Indirect Taxes and Customs (CBIC) has updated the rules for business-to-business (B2B) maintenance, repair, or overhaul (MRO) services within the shipping industry. Effective from June 2nd, 2021, the place of supply for these services will now be considered the location of the service recipient. This change aims to prevent double taxation or non-taxation and ensure uniform application of rules.

The Central Board of Indirect Taxes and Customs has changed the place of supply for B2B MRO services in the case of the shipping industry, to the location of the recipient of service. Read the official notification below:

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB- SECTION (i)]

Government of India
Ministry of Finance (Department of Revenue)
Notification No. 03/2021- Integrated Tax

New Delhi, the 2^nd June, 2021

G.S.R (E).- In exercise of the powers conferred by sub-section (13) of section 13 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.4/2019- Integrated Tax, dated the 30th September, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 748 (E), dated the 30th September, 2019, namely:-

In the said notification, in Table A, after serial number (2) and the entries relating thereto, the following serial number and entry shall be inserted, namely: -

B2B MRO Services: Place of Supply Rules for Shipping Industry Changed

(1)	(2)	(3)
“3	Supply of maintenance, repair or overhaul service in respect of ships and other vessels, their engines and other components or parts supplied to a person for use in the course or furtherance of business	The place of supply of services shall be the location of the recipient of service."

2. This notification shall come into force with effect from the 2^nd day of June, 2021.

[F. No. 354/53/2021]

Rajeev Ranjan) Under Secretary to the Government of India

Note: - The principal notification No. 04/2019 - Integrated Tax, dated the 30^th September, 2019 was published in the Gazette of India, Extraordinary, vide number G.S.R. 748 (E), dated the 30^th September, 2019 and was last amended by notification No. 02/2020 – Integrated Tax, dated the 26th March, 2020 vide number G.S.R. 224 (E), dated the 26th March, 2020.

FAQ :

The CBIC has changed the place of supply for B2B MRO services in the shipping industry to the location of the recipient of the service.

This notification came into force on the 2nd day of June, 2021.

The change specifically affects the supply of maintenance, repair, or overhaul services in respect of ships and other vessels, including their engines and components.

The change is for services supplied to a person for use in the course or furtherance of business (B2B).

The amendment is intended to prevent double taxation or non-taxation of services and ensure the uniform application of rules.

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