How to Use this app.This app finds you the place of supply for the supply of your goods and services depending on various in different scenarios explained in the IGST act.
Find your place of supply under GST
Place of supply in GST
What is place of supply?Place of supply is defined as the place where supply is made or deemed to be made under the IGST Act.
Why there is a need of Place of supply?
Well the simple answer to this question is to determine the which tax CGST, SGST, IGST is leviable on the supply. If the place of supply and location of supplier are in different states then supply is considered as interstate supply and IGST shall be levied otherwise CGST and SGST shall be levied.
How to find the place of supply under GST?IGST Act provides two separate sets of provisions for place of supply of goods and services. It can be summarized in the following image.
Finding Place of supply for supply of goods:
Section 10(a) of IGST Act: where supply involves movement of goods:In such case, the place of supply shall lie in the the state or UT in which the movement of goods terminates and goods are delivered to the buyer of recipient of goods or his/her representative.
Let us take an example-
X Limited of delhi sells 50 cell phones to Y Traders in UP. X Limited delivers the product to Y traders in its warehouse in Ahmedabad. Place of supply, in this case, will be Ahmedabad which is in gujrat and IGST will be levied as it is an Inter-State transaction.
Section 10(b) : bill to ship to model:Where person who receives the goods and the person who is billed are in different then place of supply fall in the state in which the person billed is located.
It can be understood with the help of the following example.
X Traders, a dealer in furniture, in Maharashtra, gets an order from Y Traders, also located in Maharashtra. The order is for the supply of 50 chair, with an instruction to ship the chair to Z trader of Tamil Nadu. Z is a customer of Y Traders.
First between X and Y
Here the person billed is Y, while goods are shipped to Z, in this case the Place of supply fall in maharashtra. Hene CGST and SGST shall be levied.
Second transactions is between Y and Z:
This is not based on bill to ship to model hence normal provisions apply here, assuming that this movement terminates in Tamil nadu hance as per section 10(a) place of supply will be in tamil nadu hance IGST shall be levied.
Where person billed is located outside India then, it won't amount to export rather it would amount to interstate trade.
Section 10(c): where the supply doesn't involve movement:In such cases the place of supply will fall in the state in which the recipient of goods takes the delivery.
X Limited of Maharashtra opens a new office in Delhi. It purchases 10 air conditioner to be installed at its Delhi office from Y electronics in Maharashtra.
In this case, the location of the supplier is Maharashtra, but a place of supply will be Delhi. Hence, IGST will be levied.
Section 10(d): goods require some kind of installation or assembly:In this case, place of supply will lie in the state in which goods a installed or assembled.
Section 10(e) : Goods on board a conveyance:When the goods are supplied on boarding a conveyance including, an aircraft, vessal or any vehicle then place of supply will fall in the state where the goods were taken on board.
Mr. X is traveling on a cruise liner from Mumbai to Goa. He purchases a book from the in-house store in the cruise liner. These books were on-boarded from Mumbai. Registered place of business of the book shop is in Mumbai. Place of supply, in this case, will be Mumbai. This
is an intrastate supply, and CGST and SGST will be charged.
Section 11: export and import of goods:
In case of export place of supply will simply fall outside india
In caae of imports, place of supply will be in the state where importers imports the goods.
Hence in both the case, IGST shall be levied.
Place of supply for supply of services:Section 12 deals with this :
Part 1) place of supply in B2B supply of services :In this case, the place of supply will always fall in the state in which the recipient is located.
I.e. POS = LOR
Part 2) In B2C suppliesIn these cases place of supply shall be specific to the supply which may be as follows.
(1) service performed on a property :
In this case Place of supply will fall in the state in which the property is located.
Note that if the service is performed on properties of a same person in different states then it shall be taxable on proportional basis.
(2) performance based services : the place of supply would be the place of perfomance.
(3)Event based services : in this case place of supply would be the place of event
Difference between events and performances.
Event service is a service of organising an event where
Supplier is the event organiser.
Recipients are the audience who avail this service by buying the tickets.
While performance services on the other hand are the services that are performed by the artist in the event. Here artists are the supplier of services and event organisers are the recipient of services.
(4)Courier service : here place of supply shall be the place of delivery to the receiving courier office.
(5) Passenger transport:
place of supply = first embarking point
(6) on board services (like TV and food in flight or in train)
Note that each round trip shall be taken into account separately.
(7) banking service :
Place of supply = Location of recipient.
Special case in section 13 of IGST Act.
If services are provided outside india and some part of it(even 1% of it) is provided in india then place of supply would be Location of performance in india and ENTIRE(not proportional) service shall be taxable.
However it has an exception.
If goods are imported to perform some services on them(not to use them) and then after performing these services, goods are exported then place of supply would be location of recipient and hence No GST shall be levied. This complies with the objectives of government for export of goods not the taxes so so make our exports cheaper and competitive in global markets.