Place of Supply (GST)

Cheatsheet Content

1. Introduction to Place of Supply Definition: 'Place of Supply' refers to the place where goods or services are consumed, determining the tax jurisdiction. Importance: Essential for ascertaining if a supply is intra-State (SGST/UTGST + CGST) or inter-State (IGST). Consumption Principle: GST is a destination-based tax, levied where consumption occurs. Challenges for Services: Intangible nature of services can make determining the place of supply complex due to factors like: Manner of delivery can be altered (e.g., telecom services). Service provider/receiver may not be easily ascertainable. Fixed location for service provider is not mandatory; recipient can be mobile. Elements like location of service provider, recipient, place of activity/performance, consumption, and actual beneficiary are used as proxies. 2. B2B vs. B2C Transactions B2B (Business to Business): Supply made by a registered person to another registered person. Recipient takes Input Tax Credit (ITC). Place of supply often defaults to the recipient's location as credit is taken by the recipient. B2C (Business to Consumer): Supply made to an unregistered person who consumes the supply. Recipient cannot take ITC. Taxes paid reach the Government directly. 3. Relevant Definitions (IGST Act) Continuous Journey: A journey with single/multiple tickets/invoices issued at the same time, with no stopover between legs. Stopover: A place where a passenger can disembark to transfer or break journey. Conveyance: Includes vessel, aircraft, train, or vehicle. Fixed Establishment: A place (other than place of business) with sufficient permanence and resources to supply/receive services. Location of the Recipient of Services: If registered: Location of the place of business for which registration is obtained. If fixed establishment: Location of that fixed establishment. If multiple establishments: Location of the establishment most directly concerned. In absence of above: Usual place of residence of the recipient. Location of the Supplier of Services: (Similar logic to recipient's location) If registered: Location of the place of business for which registration is obtained. If fixed establishment: Location of that fixed establishment. If multiple establishments: Location of the establishment most directly concerned. In absence of above: Usual place of residence of the supplier. Place of Business: Place where business is ordinarily carried on (includes warehouse, godown, etc.). Place where books of account are maintained. Place where business is carried on through an agent. Recipient: If consideration payable: Person liable to pay consideration. If no consideration (goods): Person to whom goods are delivered/made available. If no consideration (services): Person to whom service is rendered. Includes an agent acting on behalf of the recipient. Supplier: Person supplying goods/services, including an agent. 4. Place of Supply of Goods (Sec 10, IGST Act) 4.1. Supply involving movement of goods [Sec 10(1)(a)] Rule: Location of goods at the time movement terminates for delivery to the recipient. Movement can be by supplier, recipient, or any other person. Example: Goods shipped from Nasik, Maharashtra to Pune, Maharashtra. Place of supply = Pune. 4.2. "Bill to Ship to" Supply [Sec 10(1)(b)] Rule: If goods are delivered by supplier to a recipient on instructions of a third person, it's deemed the third person received the goods. Place of supply = principal place of business of such third person. This applies whether the third person acts as agent or on own account, and whether or not there's a transfer of title documents. This provision deals with the first supply (supplier to third person). The second supply (third person to actual recipient) is governed by 10(1)(a). 4.3. Supply not involving movement of goods [Sec 10(1)(c)] Rule: Location of goods at the time of delivery to the recipient. Example: Machine leased and then sold "as is where is" basis. Place of supply = location of machine at sale. 4.4. Supply to an unregistered person [Sec 10(1)(ca)] Rule: If address recorded in invoice: Location as per address in invoice. If address not recorded: Location of the supplier. Recording the State name is sufficient for address. Clarification: If billing address and delivery address are different, delivery address is the place of supply. 4.5. Supply involving installation or assembly of goods [Sec 10(1)(d)] Rule: Place of such installation or assembly. This is a composite supply where goods are principal supply. 4.6. Goods supplied on board a conveyance [Sec 10(1)(e)] Rule: Location at which such goods are taken on board. Applies to aircraft, train, vessel, motor vehicle. Example: Goods taken on board a train in New Delhi, sold in Jaipur. Place of supply = New Delhi. 4.7. Residual Cases [Sec 10(2)] If place of supply cannot be determined by above rules, Government may prescribe manner. 5. Place of Supply of Services (Sec 12, IGST Act) Applicable when both supplier and recipient are in India. 5.1. General Rule [Sec 12(2)] Applies to services not covered by specific rules (Sec 12(3)-(14)). To registered person: Location of the recipient. To unregistered person: If address available in supplier's records: Location of such unregistered person. In other cases: Location of the supplier. 5.2. Immovable Property & Lodging Services [Sec 12(3)] Covers: Services directly related to immovable property (architects, interior decorators, construction work, etc.). Lodging accommodation (hotel, inn, guest house, home stay, houseboat, etc.). Accommodation for organizing events (marriage, social functions). Ancillary services to the above. Rule: Location where the immovable property, boat, or vessel is located or intended to be located. Exception: If property/boat/vessel is located outside India, place of supply = location of the recipient. Multiple States/UTs: If property is in more than one State/UT, supply is in each State/UT in proportion to value determined by contract or prescribed basis. Proportionate Value (without contract): Lodging accommodation: Number of nights stayed. Other services related to immovable property: Area of immovable property in each State/UT. Houseboat/vessel: Time spent in each State/UT (based on provider's declaration). 5.3. Restaurant, Catering, Personal Grooming, Health Services [Sec 12(4)] Rule: Location where such services are actually performed. 5.4. Training and Performance Appraisal Services [Sec 12(5)] To registered person (B2B): Location of such person. To unregistered person (B2C): Place where the service is actually performed. 5.5. Admission to Events/Amusement Parks [Sec 12(6)] Covers: Admission to cultural, artistic, sporting, scientific, educational, entertainment events, amusement parks, and ancillary services. Rule: Place where the event is actually held or where the park/place is located. 5.6. Organisation of Events & Sponsorship [Sec 12(7)] Covers: Organisation of events (cultural, artistic, sporting, etc.) or assigning sponsorship. To registered person: Location of recipient. To unregistered person: Place where the event is actually held. If event held outside India: Location of recipient. Multiple States/UTs (unregistered recipient): If event in more than one State/UT, supply is in each State/UT in proportion to value determined by contract or generally accepted accounting principles. 5.7. Transportation of Goods (Mail/Courier) [Sec 12(8)] To registered person: Location of such person. To unregistered person: Location at which such goods are handed over for transportation. Note: For goods transported outside India, place of supply determined by these provisions if supplier & recipient are in India. 5.8. Passenger Transportation Service [Sec 12(9)] To registered person: Location of such person. To unregistered person: Place where the passenger embarks on the conveyance for a continuous journey. Right to passage for future use (embarkation unknown): Determined by Sec 12(2) (General Rule). Explanation: Return journey is treated as a separate journey. 5.9. Service Supplied on Board a Conveyance [Sec 12(10)] Rule: Location of the first scheduled point of departure of that conveyance for the journey. Conveyance includes vessel, aircraft, train, motor vehicle. 5.10. Telecommunication Services [Sec 12(11)] Fixed telecom line, leased circuits, internet leased circuits, cable, dish antenna: Location where the line/circuit/connection/antenna is installed. Post-paid mobile/internet services: Location of billing address of recipient in supplier's records. If billing address not available: Location of the supplier. Pre-paid mobile/internet/DTH services: Through selling agent/re-seller/distributor: Address of agent/re-seller/distributor. To final subscriber (pre-payment received): Location where pre-payment received or vouchers sold. Through internet banking/e-payment: Location of recipient in supplier's records. Other cases: Address of recipient in supplier's records; if not available, location of supplier. Leased circuit in multiple States/UTs: Supply in each State/UT in proportion to value determined by contract or number of points in each State/UT. 5.11. Banking and Other Financial Services [Sec 12(12)] Rule: Location of the recipient of services on the records of the supplier. Exception: If recipient's location not available in records: Location of the supplier. 5.12. Insurance Services [Sec 12(13)] To registered person: Location of such person. To unregistered person: Location of the recipient of services on the records of the supplier. 5.13. Advertisement Services to Government [Sec 12(14)] Rule: Each State/Union Territory where the advertisement is broadcasted/run/played/disseminated. Value specific to each State/UT is in proportion to the amount attributable by contract or prescribed basis. Manner of determining proportionate value (without contract): Newspapers: Amount payable for ads in all editions published in each State/UT. Printed material (pamphlets, etc.): Specific number of material distributed in each State/UT. Hoardings: Amount payable for hoardings in each State/UT. Trains: Ratio of length of railway track in each State/UT. Utility bills: Amount payable for ads on bills with billing addresses in each State/UT. Railway tickets: Ratio of number of railway stations in each State/UT. Radio stations: Amount payable to radio station which is part of each State/UT. Television channels: Viewership of channel in each State/UT (based on BARC figures, population ratios). Cinema halls: Amount payable to cinema hall/screens in multiplex in each State/UT. Internet: Internet subscribers in each State/UT (based on TRAI figures, population ratios). SMS: Telecom subscribers in each State/UT (based on telecom circle figures, population ratios). 6. Inter-State Supply (Sec 7, IGST Act) Goods: Location of supplier and place of supply are in: Two different States. Two different Union Territories. A State and a Union Territory. Services: Location of supplier and place of supply are in: Two different States. Two different Union Territories. A State and a Union Territory. Residuary Clause [Sec 7(5)(c)]: Supply of goods or services (or both) in the taxable territory, not being an intra-State supply and not covered elsewhere in Sec 7, is treated as inter-State supply. 7. Intra-State Supply (Sec 8, IGST Act) Goods: Location of supplier and place of supply are in the same State or same Union Territory. Services: Location of supplier and place of supply are in the same State or same Union Territory. Exceptions: Supplies to/by SEZ Unit/Developer, goods to tourists, goods imported into India are NOT intra-State supply even if location of supplier and place of supply are in same State/UT. Distinct Persons: Establishments of the same entity in different States/UTs or registered separately within the same State/UT are treated as distinct persons. Supply between them is inter-State. 8. Supplies in Territorial Waters (Sec 9, IGST Act) Territorial Waters: Up to 12 nautical miles from the baseline of a coastal state. Rule: If location of supplier or place of supply is in territorial waters, it is deemed to be in the coastal State or Union Territory where the nearest point of the appropriate baseline is located.