LAWEMPIRE

PLACE OF SUPPLY

PLACE OF SUPPLY INTER STATE AND INTRA STATE

SUPPLY
1. If supplier of goods or service and place of supply of goods or service are located
in same state - (CGST and SGST payable)
2. If supplier and place of supply are located in different state - (IGST payable)

IGST Act,2017 : Statutory provision of place of supply of goods or service are given in
section 10 to 13 of IGST Act.

Supply involves movement of Where movement of

goods goods terminates

Where goods are delivered by

Place of supply will be
supplier to recipients on
location of third person
direction of third person

Supply doesnt involve Place of supply shall be location of

movement of goods such goods

Where goods are assembled and

install at site The place of installation
or assembly

Goods are supplied on board a

conveyance Place where goods are
loaded

OTHER SUPPLY Decided by CG on

recommendation of GST
council

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A. PLACE OF SUPPLY [POS] - Supply involves movement of

goods

Case 1. Mr X Of Mumbai receive an order for supply of one ton metal from Mr.Y who is also
from mumbai (Price quoted by Mr. X is including freight amount) So mr. X arranges for
transportation of goods to Mr. Y at Ahmadabad The movement of goods terminates at
Ahmadabad place of supply of goods.

Case 2. But in above case, Mr. Y says that I will send Mr.A with Truck and Load the goods in
that Truck from Mumbai then also movement of goods terminate at Ahmadabad for place of
supply of goods.

B. PLACE OF SUPPLY [POS] - Where goods are delivered by

supplier to recipients on direction of third person

CASE 1 Where the goods are delivered by the supplier to a recipients or any other person on
direction of third person

Place of supply shall be deemed to be office of the person who has directed to
deliver such goods[i.e. location of third person]
Place of termination of movement of goods will not be place of supply.
But mr. X company directs Mr. Y to deliver the goods to Mr. Z in Gujarat
So Mr. X company directs Mr. Y to deliver the goods to Mr. in Gujarat
Delivery of goods takes place in Gujarat
[In this place of supply is location of Mr.X act as agent for m/s Z as
principal]

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C : PLACE OF SUPPLY [POS] - Where supply doesnt involve
movement of goods:

Place of supply shall be location of such goods at the time of delivery to recipient.
It doesnt matter what is location of buyer and location of supplier

Case 1 : X goods stored at godown located in Bhopal(M.P.) Mr.A owner of goods located in
Mumbai and Mr. B also located in Mumbai approaches Mr.A for purchase of goods lying in
Bhopal and Mr. B further inform that he doesnt want delivery of goods in Mumbai

- So Mr A can issue document for transfer of ownership of goods lying in Bhopal to Mr.B
- Then Place of supply is Bhopal it is an interstate supply IGST will be applicable.

Case 2 : We can say in financial leasing Where lease period over, then property can pass to
lessee at very normal amount and it doesnt involve movement of goods from one place to
another

Then also place of supply will be as per this rule.

Case 3 : No movement - job worker making capital goods for the principal but himself uses for
making goods for the principal.

D : PLACE OF SUPPLY [POS]section 5(4) - When goods are assembled

or installed at site(clause (d) of section 10(1) ) place of supply shall be the place
of installation or assembly It doesnt matter what is location of buyer and
seller.

Case 1 : X from Mumbai place order to Mr. Y for installation of generator in his factory located
at branch, Gujrat

- Mr. y procures Generator, set of chimney, Electrical cable, distribution board, other item
from different state in the country and arrange for delivery in branch ,gujrat, IGST will
be applicable

E. PLACE OF SUPPLY [POS]section 5(5) - Where goods are supplied

on board a conveyance - if goods are supplied in a train / aircraft / vessel to the

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passenger then Goods are loaded in the train from particular station But actual consumption of
goods may take place at subsequence station Place of supply will be the place where goods
are loaded

Case 1: Rajdhani train(Mumbai to delhi) : Mr. X supplied bed rolls which are given to the
passengers at night times. Bed rolls are loaded at Mumbai central station and it supplied when
passenger require then place of supply will be Mumbai.

F. Other supply [Residuary Rule] section 5(6): Place of supply decided by

CG on recommendation of GST council.

PLACE OF SUPPLY IN CASE OF INSURANCE BUSINESS

Life insurance

Service to registered
Service to
person like keyman
unregistered person
policy,group policy

POS= location of POS = principal

receipt of service on place of business of
record of supplier registered person

IF THERE IS CHANGE IN THE ADDRESS OF RECIPIENT

Intimate to insurance
Not intimated to
company by recipients
insurance company by
receipient

POS = on the basis of

POS = on the basis of
new records available
old records available
with insurance company
with insurance co.

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General insurance

Insurance on various types of assets : building, plant

and machinery, stock in trade etc.

POS = location of reciepients of service (not the

location of assets of business)

Example: X company has factory in Himachal Pradesh, Chennai, and Karnataka and
office in Mumbai. X company has registered in Mumbai under GST. The X company
obtains insurance for the assets located at Himachal Pradesh, Chennai, Karnataka
and Mumbai from insurance company located at delhi.

The place of supply of service by the insurance company would be Mumbai

i.e. the location of X company where it has obtained registration. The location
of assets which are insured has no relevance in determining the place of
supply of service.

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Banking/ other financial

services 6(13)

Address of recipient is Address of recipient is not known

known

POS = location of supplier

POS = location of recipient
of service
of service on record of
supplier of service

Example : If the customer who does not have any

account with the bank comes for obtaining a Demand
Draft. He deposits Rs. 5,000 across the counter and
fill up the form the address of the recipient of service
is not on the record of the bank . therefore as per the
provision the place of supply shall be the location of
the supplier

Stock broking services

As per SEBI regulation every client of stock broker is required to keep

certain margin deposit with the broker which shall be payable by
broker to S.E.[STOCK EXCHANGE]

Address of client in the record of stock broker is generally available

POS = place of location of recipients of service on the record of the service

Example: stockbroker is located in Mumbai but his clients are spread over Kolkata,
Chennai, Bangalore, etc. The stockbroker purchase and sell all securities on behalf of
client as per the record of stockbroker. As these clients are located in Kolkata,
Chennai, Bangalore etc. The place of supply of service will be the respective places of
recipient of service. Since these person are located outside Mumbai the stockbroker
will have to charge IGST in each of the case

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SERVICE PROVIDED BY WAY TELECOMMUNICATION[6(12)]

A) B) C) D)

Fixed Post paid

In case where mobile In case where
telecommunicati basis
connection for not covered
on line, leased
telecommunication are under (b) and (c)
circuits cable or
provided on
dish anteena Location of prepayment through
billing address voucher
of receipient of
ADDRESS OF
POS = location service on
RECIPIENT AS
where record of
PER RECORDS
telecommunication supplier of
OF SUPPLIER
line leased circuit or service
cable connection or
dish antenna is
installed for receipt By any person to final
Through selling agent
of service subscriber = location
= address of selling
agent or reseller or where such pre pay .
distribution as per is received or such
records of supplier at voucher are sold
the time of supply

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PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT
OF GOODS

Section 11 of IGST Act

Section 11(1) Section 11(2) Place of

Determination of supply in case of
place of supply of export from india
goods imported in
india

POS = location of POS = location

importer outside india

PLACE OF SUPPLY OF SERVICE SHALL BE PLACE OF ACTUAL

PERFORMANCE:

The place of supply of the said services shall be the location where the
services are actually performed.

a. Student X joins coaching class Y located in Kota , Rajasthan. The student enrolls
himself and pays the fee. In such case, the service receiver is student himself . The
location of coaching class at Kota, Rajasthan will be considered as place of supply.

b. Company X deputes manager Y for certain course conducted by IIM ahmedabad in

ahmedabad. The manager undergoes training in the course at ahmendabad.
Manager Y is representing the company X and has not joined the course in his
personal capacity. In this case Mr.Y also is acting on behalf of the service receiver
X. In such case also the place of supply of service is where the services are

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performed. As the course is conducted in ahmedabad, the place of supply of service
will be ahmedabad.

Place of supply of:

Restaurant services,

catering services,

Personal grooming services,

Fitness services,

beauty treatment services, and

Health service including cosmetic and plastic surgery

shall be the location where the services are actually performed.

Some of the above services may relate to businesses and business events - it would have
been better to tax esp. Catering at the place where the recipient is located (in case of
businesses)

What would be the place of supply in case where the home delivery of food by
restaurant. Whether it would be the

location of restaurant i.e. where the food is actually prepared or

it will be the location where the food is delivered

Whether place of supply for delivery charges would also be governed as per the said
subsection

If personal grooming services provided over internet such as english

speaking classes then how to determine place of supply

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Place of supply for services in relation to immovable property

It Shall be the place where the immovable property is located or is intended to

be located.

Place of supply of services

1. in relation to:

immovable property, including services provided by:

architects,

interior decorators,

surveyors,

engineers

and other related experts or estate agents,

any service provided by way of grant of rights to use immovable

property or for carrying out or co-ordination of construction work, or

2. By way of lodging accommodation by a:

hotel,

Inn,

Guest house,

Homestay,

Club,

Campsite, by whatever name called,

houseboat, or

Any other vessel

3. By way of accommodation in any immovable property for organizing any marriage or

reception or matters related therewith, official , social, cultural, religious, or business
function including services provided in relation to such function at such property
4. Any service ancillary to the services above shall be the location at which the
immovable property or boat or vessel is located or intended to be located.

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When the property/boat/vessel is located in more than one State, the supply
of service shall be treated as made in each of these states in proportion to the
value for services separately collected or determined, in terms of the contract
or agreement entered into in this regard

Section 6(6) Services relating to training and performance appraisal

Place of supply of services in relation to training and performance appraisal:

To a registered person shall be the location of such person

To a person other than registered person shall be location where the

Section 6(7) Services relating to admission to event/ park

Place of supply services provided by way of:

1. Admission to a

cultural event,

Artistic event,

Sporting event,

Scientific event,

Educational event,

entertainment event,

Amusement park, or

Any other place

AND

1. Services ancillary to admission

2. shall be the place where the event is actually held or such place is located.

Section 6(8) Services relating to events

Place of supply of services provided by way of:

Organization of a cultural, artistic, sporting, scientific, educational or

entertainment event including supply of services in relation to a conference,
fair, exhibition, celebration or similar events, or

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Services ancillary to organization of any of the above events or services, or
assigning of sponsorship of any of the above events:

To a registered person shall be the location of such person

To a person other than a registered person shall be the place where

the event is actually held

Where the event is held in more than one State and a consolidated amount is charged for
supply of services relating to such event, the place of supply of such services shall be taken
as being in the each of the states in proportion to the value of services so provided in each
State as ascertained from the terms of the contract or agreement entered into in this regard
or, in absence of such contract or agreement, on such other reasonable basis as may be
prescribed in this behalf

Section 6 (9) Transportation of goods service

Place of supply of services by way of transportation of goods including mail or

courier:

To a registered person - shall be the location of such person

To a person other than registered person shall be the location of at which

such goods are handed over for their transportation.

Analysis

Contradictory with the current Rule. As per the current rule place of supply of such
services is the location where the goods are destined for.

As per this sub-section, if a person exports some goods out of India, the place of
provision service for transporting such goods would be in India and thus it the said
service would not qualify as export of service: all recipients outside India would be
unregistered persons only.

Likewise, if a person situated outside India sends some goods to India the place of
provision would be outside India.

Section 6(10) Passenger transportation service

continuous journey means a journey for which a single or more than one ticket or
invoice is issued at the same time, either by a single supplier of service or through an
agent acting on behalf of more than one supplier of service, and which involves no

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stop over between any of the legs of the journey for which one or more separate
tickets or invoices are issued;

o For the purposes of this clause, stopover means a place where a passenger
can disembark either to transfer to another conveyance or break his journey
for a certain period in order to resume it at a later point of time.

Section 6 (11) Services on board a conveyance

Place of supply for services on board a conveyance such as vessel, aircraft, train or
motor vehicle shall be

the location of the first scheduled point of departure of that conveyance for the
journey

Manner of determining the place of provision of services under this sub-section is

same as that in the current place of provision of service rules.

Section 6 (12) Telecommunication services

Place of supply of Telecommunication services including data transfer, broadcasting,

cable and direct to home television to any person shall:-

In case of services by way of fixed telecommunication line, leased circuits,

internet leased circuit, cable or dish antenna location where the
telecommunication line, leased circuit, cable connection or dish antenna is
installed for receipt of services.

In case of mobile connection for telecommunication and internet services

provided on-

post-paid basis be the location of billing address of service recipient

on record of service provider.

pre-paid basis be the location of where such pre-payment is received

or such vouchers are sold.

Provided that if such service is availed through internet banking or

other electronic mode of payment, place of supply shall be the location
of the service receiver on record of service provider.

Section 6 (13) Banking and other financial services

Place of supply for banking and other financial services including stock broking
services to any person shall be

the location of the recipient of services on records of the supplier of services.

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If the service is not linked to the account of the recipient of services, the place of
supply shall be the location of the supplier of services.

Some examples of such service can be 1) Currency Exchanges; 2) preparation

of demand draft by banks on cash deposit; 3) discounting of bills of exchange
etc.

It is not clear if this sub-section is applicable to services provided by

commodity exchanges or commodity traders.

Section 6 (14) Insurance Services

Section 6(15) Advertisement services to Government

Place of supply of Advertisement services to:

CG/ SG/ Statutory body/ local authority

meant for identifiable states

shall be taken as located in each of such States.

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