GST Place of Supply – Queries Asked by Clients to Chartered Accountant

GST Place of Supply – Queries Asked by Clients to Chartered Accountant. Question Answers with Chartered Accountant related to Place of Supply under GST Regime. “place of supply” means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act;

Chapter V of the IGST Act provides for determination of the ‘place of supply’ in respect of any supply of goods or supply of services. This expression has the utmost significance in determining the nature of tax payable on a supply. Simply put, a supply shall be intra-State (liable to CGST, SGST) where the location of the supplier and place of supply as determined under the said Chapter are in the same State (or Union Territory), and neither the supplier nor the recipient are SEZ units/ developers. In any other case, the supply would be treated as an inter-State supply, liable to IGST.

GST Place of Supply

GST Place of Supply – Queries Asked by Clients to CA

Mr AHello sir, Good day to you. How are you?
CAI am doing fine Mr. A, how about you?
Mr AI am doing fine. Recently I am hearing much discussions about the place of supply. Can you please elaborate how place of supply is important in GST?
CAMr. A, as we have discussed earlier, GST is a destination/consumption based taxation process.

So, determination of place of supply will help dealer to ascertain whether it is an intra-state or interstate sale

Hence, it is very important to determine the place of supply so the taxes can be charged accordingly and transferred to ultimate destination/state/ UT.

Mr AOk, so if I am raising a bill to client then obviously his address will be place of supply. Then why is the confusion is there in market?
CAHa ha, Mr A. You are right but there are several cases where transactions are not so straight forward and hence there is confusion among dealers related to determination of place of supply for those transactions.
Mr AOk, then what are rules to determine the place of supply under GST?
CAMr. A, for GST, let me break the concept of determination of place of supply in two parts i.e. the first one is for determination of place of supply of Goods and second is the determination of place of supply of services.

A. Place of Supply of Goods

Here, we will bifurcate the determination of place of supply for Goods as domestic sale and in the case of export or import of goods.

I. Place of supply of Goods in case of export and import:

ParticularsPlace of supplyExample
Goods imported into IndiaLocation of the importerM/S XYZ of Rajasthan has imported Granite from Vietnam. Here, the place of supply will be Rajasthan.
Goods exported from IndiaLocation outside IndiaM/S XYZ of Rajasthan has exported goods to United Kingdom.

Here, the place of supply will be outside India i.e. United Kingdom.

In case where supply involve movement of goodsLocation where movement terminates for deliveryM/S XYZ of Rajasthan has sold goods to M/S ABC of Gujarat. M/S XYZ has delivered the goods to the godown of M/s ABC in Gujarat. Here, the place of supply will be Gujarat.
In case where supply does not involve movement of goodsLocation of goods at the time of deliveryAuthorized manager of M/S ABC has come to Rajasthan and taken delivery of goods from M/S XYZ. He then transport these goods to Gujarat. In this case as the goods were handed over in Rajasthan, the place of supply will be Rajasthan
In case goods are supplied on the instruction of third partyDeemed place of supply is principal place of business of third partyThis is a Bill to-Ship To type transaction. For instance, M/S ABC of Gujarat has directed M/S XYZ of Rajasthan to deliver goods to Mr. P in Kerala. Then as this deemed provision the place of supply will be treated as place of business of M/S ABC i.e. Gujarat as goods are moved on their direction.
Where the goods are assembled or installed at sitePlace of supply shall be the location of such installation or assemblyM/s ABC has ordered a machine to be installed in their plant in Gujarat from M/S XYZ of Rajasthan. In this case, the place of supply will be Gujarat irrespective where the goods are delivered.
Where the goods are supplied on a board the conveyance such as vessel, aircraft, train or motor vehiclePlace of supply shall be the location at which such goods are taken on boardM/S XYZ of Rajasthan has delivered water bottles to a Mumbai bound flight at the Jaipur airport. In this case, the place of supply will be Jaipur i.e. Rajasthan

B. Place of Supply of Services

Here, we will bifurcate the determination of place of supply for services where supplier/recipient is located in India and outside India.

I. Place of supply of services where both supplier and recipient is in INDIA

For determination of supply of services where both supplier and recipient is in INDIA has been divided into a General rule and various specific rule for specific transactions. The General rule is:

ParticularsPlace of supply of servicesExample
Recipient is registered personLocation of such registered recipientM/S XYZ of Rajasthan has provided work contract services to M/S ABC of Gujarat. Here, the place of supply will be Gujarat.
Recipient is Unregistered personEither of: i) Location of the recipient where record exists, or ii) Location of supplier in other cases.M/S XYZ of Rajasthan has provided consultancy services to Mr. P. If M/S XYZ has address of Mr. P with them then place of supply will be that location AND if not then place of supply will be the location of supplier i.e. Rajasthan.

Further, there are various specific rules for determination of place of supply of services which we can discuss for those specific cases in other sessions.

II. Place of supply of services where either supplier or recipient is outside INDIA

For determination of supply of services where either supplier or recipient is outside INDIA has been divided into a General rule and various specific rule for specific transactions. The General rule is – Place of supply of services shall be the location of service recipient AND where location of recipient is not available then place of supply will be the location of supplier.

Further, there are various specific rules for determination of place of supply of services which we can discuss for those specific cases in other sessions.

Mr AOk, Thank you

Author Details

MJL & Co, Jaipur (Chartered Accountants)
Email – [email protected] (ph – 0141-4915113)

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