[FAQs] Place of Supply for Goods under GST

Statutory Provisions for Place of Supply in Case of Movement of Goods :-

In the given case:

Statutory Provisions: Please refer Q. 1

The place of supply shall be as under :

As per Section 10(1)(c) of the IGST Act, if the supply does not involve movement of goods, the place of supply is the location of goods at the time of delivery to the recipient. Since there is no movement of office furniture and fixtures in the given case, the place of supply of such goods is their location at the time of delivery to the recipient (Quickdeal Enterprises) i.e., Hissar, Haryana.

Statutory Provisions: Please refer FAQ. 1

(a) Statutory Provision:

• • • Schedule III to the CGST Act specifies transactions/activities which shall be neither treated as supply of goods nor supply of services.
    • A new activity has been added in the said Schedule III vide the CGST (Amendment) Act, 2018 namely, supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

(b) In given case:

• • • The goods procured from China were directly supplied to a customer in US.
    • In view of the abovementioned provisions, the said activity is not a supply.
    • Hence, it is not leviable to GST since “supply” is the taxable event for chargeability of GST.
    • Thus, the question of place of supply does not arise in the given case.

• • As per Section 12(3) of IGST Act, 2017 :- Where the immovable property is located in more than one State, the supply of service is treated as made in each of the States in proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf.
  • In the absence of a contract or agreement between the supplier and recipient of services in this regard, the proportionate value of services supplied in different States/Union territories (where the immovable property is located) is computed on the basis of the area of the immovable property lying in each State/Union territories [Rule 4 of the IGST Rules].

Examiner’s Comment

In case I, some examinees were not aware that the place of supply of services directly in relation to an immovable property located outside India, where service provider and service recipient are located in India is the location of recipient in terms of section 12(3) of the IGST Act, 2017. Resultantly, they wrong answered the place of supply to be the location of immovable property.

As per Section 12(3) of IGST Act, 2017, in respect of services provided directly in relation to immovable property, the Place of Supply shall be the place where immovable property is located or intended to be located. Therefore, in the given case, the place of supply of service shall be Srinagar (GST applies to whole of India including the UT of Jammu and Kashmir) which falls within the ambit of taxable territory and thus this services shall be liable to GST.

As per Section 12(7) of IGST Act, 2017 which provides for determination of the place of supply of services provided by way of assigning of sponsorship, when both recipient and supplier are in India. The place of supply will be as follows:

In sub-part (ii), some examinees were not aware that the place of supply of services by way of organization of an event provided to an unregistered person is the location where the event is actually held and if the event is held outside India, the place of supply is the location of the recipient in terms of section 12(7)(a)(ii) of IGST Act, 2017.

Resultantly, where questions requires for the place of supply if the wedding is to take place at Malaysia, they wrongly mentioned the place of supply to be Malaysia instead of Kochi.

Section 12(7)(a)(i) of IGST Act, 2017 when service by way of organization of an event is provided to a registered person, place of supply is the location of recipient.

Since, in the given case, the product launch party at Bangalore is organized for Damani Industries (registered in Mumbai), place of supply is the location of Damani Industries i.e., Mumbai.

In case the product launch party is organised at Dubai, the answer will remain the same, i.e. the place of supply is the location of Damani Industries – Mumbai.

(A) The place of supply of service if contract specifies clear details:

(B) The place of supply of service if contract specifies lump sum amount of 50 crores.

In the given situation, three supplies are involved:

As per Notification No. 9/2017 if the consideration for right to admission to the event is not more than ` 500 per person, then it will be exempt from GST. It means If the price for the entry ticket is fixed at ` 450, answer will change in respect of supply of service provided by way of admission to music concert, as mentioned in point (i) above. There will be no IGST liability

However, there will be no change in the answer in respect of supplies mentioned in points (ii) and (iii) above.

The place of supply shall be determined as follows:

The contention of Mr. Rakesh his not correct. Under GST law the taxability of any service depends upon in provisions of Section 9 of the CGST Act, 2017 and not in terms of Income-tax Act, 1961. The fact that Mr. Rakesh his a non-resident is irrelevant for determining the taxability of services received by him. As per Section 12(12), the place of supply of banking and other financial services to any person shall be the location of the recipient of services on the records of the supplier of services. In this case the location of recipient as per the records of banking company is in Surat, the place of supply of service would be Surat and since Surat falls in taxable territory, locker fee would be liable to GST.

Statutory Provisions:

(a) As per section 12(14) of the IGST Act, 2017, the place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement is taken as being in each of such States or Union territories (where the advertisement is broadcasted/run/played/disseminated).

(b) Where agreement exists: The value of the supply of such advertisement services specific to each State/Union territory is in proportion to the amount attributable to the services provided by way of dissemination in the respective States/Union territories determined in terms of the contract or agreement entered into in this regard.

Where agreement does not exist: In the absence of such a contract or agreement between the supplier and recipient of services, the proportionate value of advertisement services attributable to different States/Union territories (where the advertisement is broadcasted/run/played/disseminated) is computed in accordance with rule 3 of the IGST Rules, 2017.

(c) As per rule 3(f) of the IGST Rules, 2017, in the case of advertisement on television channels, the amount attributable to the value of advertisement service disseminated in a State shall be calculated on the basis of the viewership of such channel in such State, which in turn, shall be calculated in the following manner, namely: –

• • • • Number of viewers of such channel in each State/union Territory.
      • Viewership can be ascertained from the channel viewership figures published by the Broadcast Audience Research Council. Figures for the last week of a given quarter will be used for calculating viewership for the succeeding quarter.
      • Where the channel viewership figures relate to a region comprising of more than one State/Union territory, the viewership figures for a State/Union territory of that region, will be calculated in ratio of the populations of that State/Union territory, as determined in the latest Census.

Computation of Value of Supply

Computation of state-wise Value of Supply

• • • • Since, there are five different places of supply in the given case, ‘Moon Plus’ channel will have to issue five separate invoices for each of the States namely, ‘A’, ‘B’, ‘C’, ‘D’ & ‘E’ indicating the value pertaining to that State.

Computation of GST liability of ‘Moon Plus’:

Nature of Supply:

• • In case of supply of services in State ‘A’, the location of supplier (State ‘A’) and the place of supply are in the same State, hence the same is an intra-State supply in terms of section 8(1) of the IGST Act, 2017 and is thus, liable to CGST and SGST.
  • In all the remaining cases of supply of services, the location of the supplier (State ‘A’) and the places of supply (States ‘B’, ‘C’, ‘D’ & ‘E’) are in two different States, hence the same are inter-State supplies liable to IGST [Section 7(1)(a) of the IGST Act, 2017 read with section 5(1) of that Act].

In the absence of a contract or agreement between the supplier and recipient of services, the proportionate value of advertisement services attributable to different States/Union territories will be computed in accordance with rule 3 of IGST Rules, 2017. The provisions of the said rule are tabulated below:

Case 1 : If location of service provider and service recipient in India then place of supply is to be determine as per Section 12

Conclusion – The place of supply shall be the location of the recipient of service here – Mumbai being the location of Harish Jain. POS = Mumbai

Case 2: Where Location of Supply or Location of Recipient is outside India then place of supply is to be determined as per Section 13

Conclusion – The place of supply shall be the location of the property situated here – Paris (France). POS = pans (France).

(i) Section 10(1)(e) of the IGST Act, 2017 lays down that place of supply of goods supplied on board a conveyance like aircraft, train, vessel, or a motor vehicle, is the location where such goods have been taken on board. Thus, in the given case, the place of supply of the goods sold by Mr. Sahukaar is the location at which the goods are taken on board, i.e. New Delhi and not Jaipur where they have been sold.

(ii) As per section 11(a) of the IGST Act, 2017, if the goods have been imported in India, the place of supply of goods is the place where the importer is located. Thus, in the present case, the place of supply of the goods imported by Vidhyut Pvt. Ltd. is Noida, Uttar Pradesh

(iii) As per section 12(8) of the IGST Act, 2017, the place of supply of services by way of transportation of goods, including by mail or courier provided to an unregistered person, is the location at which such goods are handed over for their transportation.
Since in the given case, the recipient – Aatmaram – is an unregistered person, the place of supply is the location where goods are handed to Gokul Carriers over for their transportation, i.e. Kanpur.

(iv) As per section 12(12) of the IGST Act, 2017, the place of supply of banking and other financial services, including stock broking services to any person is the location of the recipient of services in the records of the supplier of services. Thus, in the given case, the place of supply is the location of the recipient of services in the records of the supplier bank, i.e. New Delhi.

(v) As per section 13(4) read with section 13(6) of the IGST Act, 2017, where services supplied directly in relation to an immovable property are supplied at more than one location, including a location in the taxable territory, the place of supply is the location in the taxable territory. Since in the given case, the immovable properties are located in more than one location including a location in the taxable territory, the place of supply of architect service is the location in the taxable territory, i.e. Pune.

One of the conditions for a supply of service to qualify as export of service is that the place of supply of said service must be outside India.

The place of supply of services supplied in respect of the goods which are temporarily imported into India for any other treatment/process and are exported after such treatment/process without being put to any use in India, other than that which is required for such treatment/process, is the location of recipient of such service [Second proviso to section 13(3)(a) of the IGST Act, 2017].

In view of the above, in the given case, the place of supply of the services provided by M/s Ankit Enterprises is the place where the services are actually performed, i.e., in India as the tools to be exported have been used in India for 3 months before their export. Resultantly, the supply of services by M/s Ankit Enterprises do not qualify as export of service.

Since the recipient is outside India, the place of supply is governed by section 13 and hence, the supply is not an intra-State supply in terms of section 8(2) of the IGST Act, 2017. Therefore, since the place of supply is in India and the supply is not an intra-State supply, the same is an inter-State supply [in terms of section 7(5)(c) of the IGST Act, 2017] of services and not of goods. Thus, the same is liable to IGST of ` 1,83,051 (` 12,00,000/118 × 18).

(i) New Delhi. In a case where location of the supplier or location of recipient of service is outside India, the place of supply of services supplied directly in relation to an immovable property including that of interior decorators is the place where the immovable property is located.

(ii) Bhubaneswar, Odisha. The place of supply of services, except the specified services made to a registered person, is the location of such person.

(iii) Patna. The place of supply of goods imported into India is the location of the importer.

(iv) Kolkata. The place of supply of services by way of fixed telecommunication line is the location where the telecommunication line is installed for receipt of services.

(v) Bangkok. The place of supply of services on board an aircraft is the location of the first scheduled point of departure of that aircraft or flight for the journey.

(vi) Mumbai. The place of supply of services provided by way of admission to an amusement park is the place where the park is located.

(vii) New Delhi. The place of supply of services by way of transportation of goods by courier to a person other than a registered person is the location at which such goods are handed over for their transportation.

(viii) Ranchi, (Jharkhand). The place of supply of stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services.

(ix) Where the supply involves movement of goods, the place of supply of such goods is the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. Therefore, the place of supply of biscuit packets sold by XYZ Ltd. to Indian Airlines is Lucknow.

Further, where the goods are supplied on board an aircraft, the place of supply shall be the location at which such goods are taken on board. Thus, the place of supply of biscuit packets sold by Indian Airlines to the passengers in Kolkata-Guwahati route is Lucknow.

In the given situation, two supplies are involved:

(i) Services provided by Mindsharp Associates to Dobriyal Technocrats Ltd. by way of providing motivational training to its top management.

(ii) Services provided by Hotel Chumchum to Mindsharp Associates by way of accommodation in said hotel for organizing the training programme.

The place of supply in respect of each of the above supplies is determined as under:

(i) As per the provisions of section 12(5)(a) of the IGST Act, 2017, the place of supply of services provided in relation to training and performance appraisal to a registered person, shall be the location of such person.

Therefore, the place of supply of services supplied by Mindsharp Associates to the registered recipient – Dobriyal Technocrats Ltd. by way of providing motivational training to its top management is the location of Dobriyal Technocrats Ltd., i.e. Gurgaon, Haryana.

(ii) As per the provisions of section 12(3)(c) of the IGST Act, 2017, the place of supply of services, by way of accommodation in any immovable property for organizing, inter alia, any official/ business function including services provided in relation to such function at such property, shall be the location at which the immovable property is located.

Therefore, the place of supply of services supplied by Hotel Chumchum to Mindsharp Associates by way of accommodation of conference hall alongwith the rooms of Hotel Chumchum for the training programme shall be the location of the Hotel Chumchum, i.e. Neemrana, Rajasthan.

(i) Since the interior designing services are under single contract, section 13(4) of IGST Act, 2017, is not applicable. In this scenario, sections 13(6) and 13(7) shall be applicable. According to which, if such services are provided at more than one location, the place of supply shall be the location in the taxable territory. Thus, the place of supply will be Surat (Gujarat).

(ii) As per section 11 of IGST Act, 2017, the place of supply of goods imported into India shall be the location of the importer. Thus, in the given case, the place of supply shall be Bengaluru (Karnataka).