Determining the Place of Supply of Goods or Services is very important as it would determine the nature of tax to be paid. In case the location of the supplier and the place of supply are within the same state – CGST & SGST would be levied whereas if the place of supply is in a different state – IGST would be levied.
What is the Place of Supply in case of Goods under GST?
|S. No.||Nature of Transaction||Place of Supply of Goods|
|1||Supply involves movement of Goods||Location of Delivery of Goods to the Recipient (Refer: Example 1)|
|2||Supply without movement of Goods||Location of Goods at the time of Delivery to the Recipient (Refer: Example 2)|
|3||Assembly or Installation at site||Place of assembly or installation (Refer: Example 3)|
|4||Supply on board a conveyance such as vessel, aircraft, train, motor vehicle etc||Location at which the goods were taken on board (Example 4)|
|5||Supplier delivering to a recipient on directions of a 3rd person||3rd persons principal place of business for the 1st leg of the supply and location of delivery to recipient for the 2nd leg. (Example 5)|
Example of Place of Supply of Goods
Example 1: Karan Batra from New Delhi purchases a Laptop from an Electronic store in UP. The laptop is delivered by the shop owner to Karan’s residence in New Delhi.
In this case, the place of supply would be considered to be New Delhi as the laptop has been delivered in New Delhi.
Example 2: Karan Batra from New Delhi purchases a Laptop from an Electronic store in UP. Karan takes the delivery of the laptop in UP itself and brings it to New Delhi in his own car.
In this case, the place of supply would be considered to be UP as the laptop was in UP at the time of delivery of the laptop.
Example 3: Chartered Club purchases a lift to be installed in their new delhi office from a vendor in Haryana.
In this case, the place of supply would be considered as New Delhi as the lift has been installed in New Delhi.
Example 4: Mr. Modi boards a flight from Mumbai to Bengaluru and purchases a bottle of water in flight during the journey. As the bottle water was taken on board the plane, the place of supply would be Bengaluru.
Example 5: A trader in consumer durables has a sales outlet in Gurgaon (Haryana) and a godown in Delhi. A resident of Delhi goes to the Gurgaon outlet, buys an air conditioner and instructs that the delivery be made at his residence in Delhi. Gurgaon office arranges for delivery of air-conditioner from its Delhi godown. This transaction involves 2 IGST supplies i.e.
- By Gurgaon outlet to Delhi resident; and
- By Delhi godown to Gurgaon outlet
In the above example, the goods were never delivered to the Gurgaon store but were directly delivered from Delhi store to Delhi’s buyer. However, as the Delhi godown has delivered goods to the customer on the directions of the Gurgaon store(here 3rd person), it will be deemed that the Gurgaon store has received the goods and then supplied these to the customer.
What is the Place of Supply in case of Services under GST?
|S. No.||Nature of Transaction||Place of Supply|
|1||Service is provided to a Registered Recipient||Location of such Recipient|
|2||Service is provided to an Unregistered Recipient||If the address of the recipient is available – Place of Supply is the Location of the Service Recipient.|
If the address of the recipient is not available – Place of supply is the Location of the Service provider.
|3||Services directly relating to Immovable Property|
|a. If property is located in India||Place where the Immovable Property is located (Example 6)|
|b. If property is located outside India||Location of Recipient.(Example 6)|
|4||Performance based services namely Restaurant & Catering, Personal Grooming, Fitness, Beauty Treatment, Health Services including Cosmetic & Plastic Surgery.||Place where the services are actually performed. (Example 7)|
|5||Admission to an event||Where the Event is held (Example 8)|
|6||Service on board a conveyance||First scheduled point of departure. (Example 9)|
|7||Banking & Financial service (including stock broking)|
|a. If Location of the Recipient is available on record of the supplier.||Location of the Service Recipient (Example 10)|
|b. If Location of the Recipient of service is not available on record of the supplier.||Location of the Service Provider (Example 10)|
|8||Insurance service (whether provided to registered or unregistered person)||Location of Service Recipient (Example 11)|
(Location of Service Recipient on record in case of Unregistered person)
Example 6: If Mr. A of Chennai has property in Delhi and avails architect services from Mr. B of Bengaluru, then the place of supply would be Delhi as the supplier, recipient and property are located in India. However, if such property is located in Japan, then the place of supply would be Chennai that is location of the service recipient.
Example 7: Mr. P of Kerala visits a hotel located in Jaisalmer and stays in the hotel for 5 days. He avails of the gym and restaurant service and makes individual payment for these services. The place of supply would be Jaisalmer as the services have been provided in Jaisalmer.
Example 8: Mr. R of Bengaluru purchases a ticket for watching a movie in a Chennai cinema hall. The place of supply in this case would be Chennai.
Example 9: A caterer is providing catering services on-board in train during Mumbai-Goa-Mangalore which is not included in the fare charges. The place of supply in this case shall be the location of the 1st scheduled point of departure of the conveyance for that journey i.e. Mumbai.
Example 10: N of Delhi who has a savings bank account with Axis Bank of Delhi gets a DD issued from Axis Bank at Mumbai, the place of supply will be Delhi as N’s address is in the records of Axis Bank. However, if N gets a DD issued from HDFC Bank of Mumbai, without having a bank account there, the place of supply would be HDFC, Mumbai.
Example 11: Mr. A residing in Bhatinda, travels by Air India flight from Chennai to Delhi and gets travel insurance done in New Delhi. The place of supply is Bhatinda, being the location of the recipient on records of the Insurance Company.
Examples of Services directly relating to Immovable Property
- By Architects, Interior Decorators, Surveyors, Engineers and other Related Experts;
- By estate agents;
- By way of grant of rights to use immovable property;
- By way of lodging accommodation by a hotel, inn, guest house, homestay, club or campsite, house boat or any other vessel; and
- By way of accommodation in any immovable property organising any marriage or reception or matters related herewith, official, social, cultural, religious or business function.
What is the Place of Supply under GST in case of Export/ Import
In case of Goods, the following would be the place of supply
|S. No.||Transaction||Place of supply|
|1||Import||Location of Importer|
|2||Export||Location outside India|
General Rule for Determining Place of Cross Border Supply of Services
In case of services, in case of supply of services outside India – the location of the recipient of service is the place of supply. However, in case the location of recipient of service is not available in the ordinary course of business, the place of supply shall be the location of the supplier of service.
Exception to the General Rule of Place of Cross Border Supply of Services
Following are the key exceptions to the principal rule of cross border supply of services
|S. No.||Categories||Place of Supply|
|1||Services directly in relation to Immovable Property||Location of Immovable Property|
|2||Performance based Services||Location where services are actually performed|
|3||Transportation of Goods, other than by way of mail or courier||Place of Destination of Goods|
|4||Passenger Transportation Services||Where the customer embarks on the conveyance for a continuous journey.|
|5||Services supplied by a banking company, financial institution, non-banking financial company to account holders.||Location of the supplier of service.|
|6||OIDAR – Online Information and Database Access or Retrieval Services||Location of the Recipient of Service.|
In case of OIDAR Services, the place of supply would be determined based on the separate rules which have been explained in this article – Place of Supply in case of sale of Digital Goods.