Clarification on place of supply of Online Services supplied by the suppliers of services to unregistered recipients-reg.

Last updated: 02 January 2025

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This notification clarifies the correct place of supply for online services provided to unregistered recipients. It addresses non-compliance issues where suppliers have incorrectly determined the place of supply on invoices. The clarification is based on Section 12(2)(b) of the IGST Act, 2017, and Rule 46 of the CGST Rules, 2017, to ensure accurate recording on invoices.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

North Block New Delhi,
Dated the 31st December, 2024

To,

The Principal Chief Commissioners/ Chief Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam / Sir,

Sub: Clarification on place of supply of Online Services supplied by the suppliers of services to unregistered recipients-reg.

References have been received from field formations regarding non-compliance of provisions of mandatory recording of correct place of supply on the invoices by the suppliers in respect of online services provided by them, either themselves or through electronic commerce operators, to unregistered recipients due to wrong interpretation of provisions of section 12(2)(b) of Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as “IGST Act”) read with rule 46 of Central Goods and Services Rules, 2017 (hereinafter referred to as “CGST Rules”)

Official copy of the circular has been attached

FAQ :

The notification clarifies the place of supply for online services provided by suppliers to unregistered recipients.

It was issued due to non-compliance observed by field formations regarding the mandatory recording of the correct place of supply on invoices for online services.

The clarification refers to Section 12(2)(b) of the Integrated Goods and Services Tax Act, 2017 (IGST Act), and Rule 46 of the Central Goods and Services Rules, 2017 (CGST Rules).

Suppliers of online services who provide these services to unregistered recipients are affected, as they need to ensure correct place of supply is recorded on their invoices.

Notification No : Circular No. 242/36/2024-GST
Source : https://taxinformation.cbic.gov.in/view-pdf/1003256/ENG/Circulars

Attached File : 322600_11411_circular_no_242_2024.pdf

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