Determination of Place of Supply of Goods & Services under GST

Ever wondered why they ask billing and shipping address separately. How to identify whether the transaction is covered under IGST or CGST/SGST? Place of supply (POS) is the answer. This article covers major cases which will help you to determine Place of supply.

Export of services- Supplier is located in India, recipient is located outside India, Place of supply is outside India, payment is received in convertible foreign exchange by the supplier and supplier and recipient are not just establishment of a distinct person.

Import of services- Supplier is located outside India, recipient is located in India and Place of supply is in India.
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(A) Place of supply of goods other than import/export
(B) Place of supply of goods involving import/export
(C) Place of supply of services provided domestically
(D) Place of supply where either of the supplier or recipient is located outside India
(A) Place of supply of goods other than import/export Supply involving movement of goods- Location of the goods when the movement terminates for delivery is the Place of supply.

For example, Mr. X of Rajasthan sells 6 water coolers to Mr. Y of New Delhi (to be delivered in New Delhi) then POS would be New Delhi.

Supply not involving movement of goods- Location of the goods at the time of delivery is the Place of supply.

For example, ABC ltd (Goa) purchases a building in Haryana which belongs to DD ltd for its branch office. Now that building is not covered in the ambit of GST but the furniture already installed is subject to GST. ABC ltd entered into separate contract for furniture. This can also be taken as permanent disposal of fixed assets which constitutes to Supply. POS is Haryana.

Bill to Ship to Sale- POS is the place of the third person who gives instruction to the supplier for delivery of goods at some other place. For example, Mr. X (third person) of Goa instructs Mr. Y (supplier) of Rajasthan to deliver goods to Mr. D (some other place) of Rajasthan. Though goods are not leaving the state still IGST is levied as this transaction is between Mr. X and Mr. Y. POS is Goa.

Installation or assembly of goods- POS is the location where goods are installed.

Goods supplied on board- Suppose a person embarks his journey from Ajmer and ends at Nasik. During his journey if he purchases any good while crossing the state of Gujarat then POS would be Ajmer and not Gujarat. Therefore POS in such cases is the place where such goods are taken on board.

(B) Place of supply of goods involving import/export POS of goods imported into India shall be the location of importer. POS of goods exported from India shall be the location abroad.

Export of goods has been considered as inter-state supplies and zero rated supply.

(C) Place of supply of services provided domestically

General rule: If recipient is registered then POS is the location of such recipient. If recipient is unregistered then POS is the address of such unregistered recipient in case if address is unavailable then location of the supplier is the POS.

Services provided in relation to immovable property- POS is the location of such immovable property. If such immovable property is located outside India then POS is the location of recipient. For example, Mr. A renders his services to Mr. B of Gujarat for an immovable property situated in Texas then POS is Gujarat and not Texas.

Performance based services- For services like restaurant service, personal grooming, fitness, beauty, health services; POS is the place where such services are performed. For example, Miss Namrata (a makeup artist from Mumbai) goes to Jaipur for doing makeup of Miss Alina then POS is Jaipur. Training and performance appraisal services- If recipient is registered then POS is the location of such person. If recipient is unregistered then POS will be the place where such services are provided.

POS in case of services by way of admission to events/amusement park etc shall be the location of such event/ amusement park etc.

Organisation of event- If recipient is registered then POS is the location of such person. If recipient is unregistered then POS will be the place where such services are provided. If such event is held outside India then POS is the location of recipient. For example, DD Events Co. organizes an event for Mr. A of Goa in Thailand then POS will be Goa and not Thailand.

Services related to transportation of goods- If recipient is registered then POS is the location of such person. If recipient is unregistered then POS is the place where such goods are handed over for transportation.

Passenger transportation service- If recipient is registered then POS is the location of such person. If recipient is unregistered then POS is the place from where the passenger commences his journey. General rule shall apply in case some cards are issued for future travel with unknown boarding time and place.

Services supplied on board- Suppose a person begins his journey from Ajmer and ends at Nasik. During his journey if he avails any service while crossing the state of Gujarat then POS would be Ajmer and not Gujarat. Telecommunication services- POS w.r.t. the cable and dish antenna will be the location where the same are installed. POS w.r.t. post paid connection will be the address of such recipient and if no records are maintained of address then location of the supplier will be POS. For Pre paid mobile connection, POS will be location of such agent/ distributor.

Stock broking services- POS is the location of the recipient of services mentioned in records. In case no records are maintained then POS will be location of supplier. Same shall apply to financial services. Insurance services- If recipient is registered then POS will be location of such person. If recipient is unregistered then POS will be the location mentioned in records.

(D) Place of supply where either of the supplier or recipient is located outside India

General rule: Where address of the recipient is provided then POS will be location of such recipient. If address is unavailable then POS will be supplier of services.

Performance based services- POS is the place where such services are performed. Services provided in relation to immovable property- POS is the location of such immovable property.

POS in case of services by way of admission to events/amusement park etc shall be the location of such event/ amusement park etc.
In any of the above three cases if services are provided in taxable territory along with one or more non taxable territory then POS will be such taxable territory. For example, Mr. AB renders his professional services to Mr. BB for properties situated in Jaipur and Dubai then POS will be Jaipur.

Banking/ Financing/ Intermediary/ hiring of means of transportation services- POS is the location of supplier.
Services related to transportation of goods- POS is the destination of goods. Passenger transportation service- POS is the place from where the person begins his journey.

OIDAR services- POS is the location of recipient of such services.
On satisfying any of the following two conditions, the service recipient is deemed to be located in India:-

(i) the recipient gives Indian address through internet
(ii) the payment is settled by an Indian card
(iii) the recipient has an Indian billing address
(iv) the device has an Indian IP address
(v) the recipient uses an Indian bank account for payment
(vi) the country code of the subscriber is of India
(vii) the recipient receives services through an Indian fixed land line.
Happy reading!!

Team Edu-Visor