| Mr A | Hello sir, Good day to you. How are you? |
| CA | I am doing fine Mr. A, how about you? |
| Mr A | I am doing fine. Recently I am hearing much discussions about the place of supply. Can you please elaborate how place of supply is important in GST? |
| CA | Mr. A, as we have discussed earlier, GST is a destination/consumption based taxation process.
So, determination of place of supply will help dealer to ascertain whether it is an intra-state or interstate sale
Hence, it is very important to determine the place of supply so the taxes can be charged accordingly and transferred to ultimate destination/state/ UT.
|
| Mr A | Ok, so if I am raising a bill to client then obviously his address will be place of supply. Then why is the confusion is there in market? |
| CA | Ha ha, Mr A. You are right but there are several cases where transactions are not so straight forward and hence there is confusion among dealers related to determination of place of supply for those transactions. |
| Mr A | Ok, then what are rules to determine the place of supply under GST? |
| CA | Mr. A, for GST, let me break the concept of determination of place of supply in two parts i.e. the first one is for determination of place of supply of Goods and second is the determination of place of supply of services.
A. Place of Supply of Goods
Here, we will bifurcate the determination of place of supply for Goods as domestic sale and in the case of export or import of goods.
I. Place of supply of Goods in case of export and import:
| Particulars |
Place of supply |
Example |
| Goods imported into India |
Location of the importer |
M/S XYZ of Rajasthan has imported Granite from Vietnam. Here, the place of supply will be Rajasthan. |
| Goods exported from India |
Location outside India |
M/S XYZ of Rajasthan has exported goods to United Kingdom.
Here, the place of supply will be outside India i.e. United Kingdom.
|
| In case where supply involve movement of goods |
Location where movement terminates for delivery |
M/S XYZ of Rajasthan has sold goods to M/S ABC of Gujarat. M/S XYZ has delivered the goods to the godown of M/s ABC in Gujarat. Here, the place of supply will be Gujarat. |
| In case where supply does not involve movement of goods |
Location of goods at the time of delivery |
Authorized manager of M/S ABC has come to Rajasthan and taken delivery of goods from M/S XYZ. He then transport these goods to Gujarat. In this case as the goods were handed over in Rajasthan, the place of supply will be Rajasthan |
| In case goods are supplied on the instruction of third party |
Deemed place of supply is principal place of business of third party |
This is a Bill to-Ship To type transaction. For instance, M/S ABC of Gujarat has directed M/S XYZ of Rajasthan to deliver goods to Mr. P in Kerala. Then as this deemed provision the place of supply will be treated as place of business of M/S ABC i.e. Gujarat as goods are moved on their direction. |
| Where the goods are assembled or installed at site |
Place of supply shall be the location of such installation or assembly |
M/s ABC has ordered a machine to be installed in their plant in Gujarat from M/S XYZ of Rajasthan. In this case, the place of supply will be Gujarat irrespective where the goods are delivered. |
| Where the goods are supplied on a board the conveyance such as vessel, aircraft, train or motor vehicle |
Place of supply shall be the location at which such goods are taken on board |
M/S XYZ of Rajasthan has delivered water bottles to a Mumbai bound flight at the Jaipur airport. In this case, the place of supply will be Jaipur i.e. Rajasthan |
B. Place of Supply of Services
Here, we will bifurcate the determination of place of supply for services where supplier/recipient is located in India and outside India.
I. Place of supply of services where both supplier and recipient is in INDIA
For determination of supply of services where both supplier and recipient is in INDIA has been divided into a General rule and various specific rule for specific transactions. The General rule is:
| Particulars |
Place of supply of services |
Example |
| Recipient is registered person |
Location of such registered recipient |
M/S XYZ of Rajasthan has provided work contract services to M/S ABC of Gujarat. Here, the place of supply will be Gujarat. |
| Recipient is Unregistered person |
Either of: i) Location of the recipient where record exists, or ii) Location of supplier in other cases. |
M/S XYZ of Rajasthan has provided consultancy services to Mr. P. If M/S XYZ has address of Mr. P with them then place of supply will be that location AND if not then place of supply will be the location of supplier i.e. Rajasthan. |
Further, there are various specific rules for determination of place of supply of services which we can discuss for those specific cases in other sessions.
II. Place of supply of services where either supplier or recipient is outside INDIA
For determination of supply of services where either supplier or recipient is outside INDIA has been divided into a General rule and various specific rule for specific transactions. The General rule is – Place of supply of services shall be the location of service recipient AND where location of recipient is not available then place of supply will be the location of supplier.
Further, there are various specific rules for determination of place of supply of services which we can discuss for those specific cases in other sessions.
| Particulars | Place of supply | Example | Goods imported into India | Location of the importer | M/S XYZ of Rajasthan has imported Granite from Vietnam. Here, the place of supply will be Rajasthan. | Goods exported from India | Location outside India | M/S XYZ of Rajasthan has exported goods to United Kingdom.
Here, the place of supply will be outside India i.e. United Kingdom.
| In case where supply involve movement of goods | Location where movement terminates for delivery | M/S XYZ of Rajasthan has sold goods to M/S ABC of Gujarat. M/S XYZ has delivered the goods to the godown of M/s ABC in Gujarat. Here, the place of supply will be Gujarat. | In case where supply does not involve movement of goods | Location of goods at the time of delivery | Authorized manager of M/S ABC has come to Rajasthan and taken delivery of goods from M/S XYZ. He then transport these goods to Gujarat. In this case as the goods were handed over in Rajasthan, the place of supply will be Rajasthan | In case goods are supplied on the instruction of third party | Deemed place of supply is principal place of business of third party | This is a Bill to-Ship To type transaction. For instance, M/S ABC of Gujarat has directed M/S XYZ of Rajasthan to deliver goods to Mr. P in Kerala. Then as this deemed provision the place of supply will be treated as place of business of M/S ABC i.e. Gujarat as goods are moved on their direction. | Where the goods are assembled or installed at site | Place of supply shall be the location of such installation or assembly | M/s ABC has ordered a machine to be installed in their plant in Gujarat from M/S XYZ of Rajasthan. In this case, the place of supply will be Gujarat irrespective where the goods are delivered. | Where the goods are supplied on a board the conveyance such as vessel, aircraft, train or motor vehicle | Place of supply shall be the location at which such goods are taken on board | M/S XYZ of Rajasthan has delivered water bottles to a Mumbai bound flight at the Jaipur airport. In this case, the place of supply will be Jaipur i.e. Rajasthan | Particulars | Place of supply of services | Example | Recipient is registered person | Location of such registered recipient | M/S XYZ of Rajasthan has provided work contract services to M/S ABC of Gujarat. Here, the place of supply will be Gujarat. | Recipient is Unregistered person | Either of: i) Location of the recipient where record exists, or ii) Location of supplier in other cases. | M/S XYZ of Rajasthan has provided consultancy services to Mr. P. If M/S XYZ has address of Mr. P with them then place of supply will be that location AND if not then place of supply will be the location of supplier i.e. Rajasthan. |
| Particulars | Place of supply | Example |
| Goods imported into India | Location of the importer | M/S XYZ of Rajasthan has imported Granite from Vietnam. Here, the place of supply will be Rajasthan. |
| Goods exported from India | Location outside India | M/S XYZ of Rajasthan has exported goods to United Kingdom.
Here, the place of supply will be outside India i.e. United Kingdom.
|
| In case where supply involve movement of goods | Location where movement terminates for delivery | M/S XYZ of Rajasthan has sold goods to M/S ABC of Gujarat. M/S XYZ has delivered the goods to the godown of M/s ABC in Gujarat. Here, the place of supply will be Gujarat. |
| In case where supply does not involve movement of goods | Location of goods at the time of delivery | Authorized manager of M/S ABC has come to Rajasthan and taken delivery of goods from M/S XYZ. He then transport these goods to Gujarat. In this case as the goods were handed over in Rajasthan, the place of supply will be Rajasthan |
| In case goods are supplied on the instruction of third party | Deemed place of supply is principal place of business of third party | This is a Bill to-Ship To type transaction. For instance, M/S ABC of Gujarat has directed M/S XYZ of Rajasthan to deliver goods to Mr. P in Kerala. Then as this deemed provision the place of supply will be treated as place of business of M/S ABC i.e. Gujarat as goods are moved on their direction. |
| Where the goods are assembled or installed at site | Place of supply shall be the location of such installation or assembly | M/s ABC has ordered a machine to be installed in their plant in Gujarat from M/S XYZ of Rajasthan. In this case, the place of supply will be Gujarat irrespective where the goods are delivered. |
| Where the goods are supplied on a board the conveyance such as vessel, aircraft, train or motor vehicle | Place of supply shall be the location at which such goods are taken on board | M/S XYZ of Rajasthan has delivered water bottles to a Mumbai bound flight at the Jaipur airport. In this case, the place of supply will be Jaipur i.e. Rajasthan |
| Particulars | Place of supply of services | Example |
| Recipient is registered person | Location of such registered recipient | M/S XYZ of Rajasthan has provided work contract services to M/S ABC of Gujarat. Here, the place of supply will be Gujarat. |
| Recipient is Unregistered person | Either of: i) Location of the recipient where record exists, or ii) Location of supplier in other cases. | M/S XYZ of Rajasthan has provided consultancy services to Mr. P. If M/S XYZ has address of Mr. P with them then place of supply will be that location AND if not then place of supply will be the location of supplier i.e. Rajasthan. |
| Mr A | Ok, Thank you |