Place of Supply Under GST

3. Place of Supply for Export and Import

1. Place of Supply for Goods

The place of supply for goods is primarily determined by Section 10 of the IGST Act. There are different scenarios to consider:

a. Goods Supplied within the Same State (Intrastate Supply):

If the goods are supplied and delivered within the same state or union territory, the place of supply is the location of the supplier.

Example: If a supplier in Maharashtra delivers goods to a buyer in Maharashtra, the place of supply is Maharashtra.

b. Goods Supplied to a Different State (Interstate Supply):

If the goods are supplied from one state to another, the place of supply is the location of the buyer.

Example: If a supplier in Maharashtra delivers goods to a buyer in Delhi, the place of supply is Delhi.

c. Movement of Goods (Destination Based):

If the goods are supplied from one location to another location (via a third party or transport), the place of supply is the destination of goods (where the goods are delivered).

Example: If goods are moved from Mumbai to Pune, the place of supply is Pune.

d. Goods Supplied Without Movement (Delivery on-site):

If goods are delivered and supplied without movement (for example, through a sale at the supplier's place), the place of supply is the location of the goods at the time of supply.

Example: If goods are delivered from a warehouse or showroom in Mumbai to a buyer in Mumbai, the place of supply is Mumbai.

e. Goods Supplied to a Special Location:

In certain cases, such as goods supplied to a job worker or goods being sent on a return basis, the place of supply will be determined by specific rules.

2. Place of Supply for Services

The place of supply for services is primarily determined by Section 12 of the IGST Act. There are several general rules and exceptions that apply to different types of services.

a. General Rule for Services:

Place of Supply for services is the location of the recipient (i.e., where the service is being received).

Example: If a business in Delhi provides consultancy services to a client in Kolkata, the place of supply is Kolkata.

b. Specific Services with Unique Rules:

Certain services have specific place of supply rules. Below are some examples:

i. Services Related to Immovable Property (e.g., Construction, Real Estate, etc.):

The place of supply is where the immovable property is located.

Example: For construction services provided to a client building a house in Goa, the place of supply is Goa.

ii. Services Provided by Bank or Financial Institutions:

The place of supply is where the account holder is located.

Example: If a bank provides a loan to a person in Chennai, the place of supply is Chennai.

iii. Transportation of Goods (Services):

The place of supply for transportation of goods (excluding passengers) is the destination of the goods.

Example: For transportation of goods from Delhi to Mumbai, the place of supply is Mumbai.

iv. Passenger Transport Services:

The place of supply is where the passenger embarks on the journey.

Example: If a person boards a flight in Delhi to travel to Chennai, the place of supply is Delhi.

v. Services of Intermediaries:

The place of supply is where the intermediary is located.

- Example: If an intermediary (like a broker or agent) is located in Mumbai and helps a company in Delhi to purchase goods from abroad, the place of supply will be Mumbai.

vi. Online Information and Database Access or Retrieval Services:

The place of supply is the location of the recipient (where they are registered or located).

Example: If a company in the US subscribes to online data services from India, the place of supply is India.

vii. Telecommunication Services:

The place of supply for telecom services is the location where the telecommunication service is provided.

Example: If a mobile phone service is provided to a customer in Delhi, the place of supply is Delhi.

3. Place of Supply for Export and Import

a. Export of Goods and Services:

The place of supply for exports (both goods and services) is treated as outside India. Exports are zero-rated under GST, meaning no tax is applied, but the exporter can claim a refund for taxes paid on inputs.

b. Import of Goods and Services:

The place of supply for imported goods is the location in India where the goods are imported.
- Example: If goods are imported into Mumbai, the place of supply is Mumbai.

The place of supply for imported services is India, and the recipient of the service is liable to pay reverse charge (if applicable).

4. Special Cases

a. Mixed Supply:

When multiple goods or services are supplied together as a mixed bundle, the place of supply is determined by the nature of the predominant item in the mix.

b. Composite Supply:

In case of composite supply, where a principal supply is accompanied by additional services or goods, the place of supply is determined by the place of supply of the principal supply.

Example: If you provide a hotel accommodation with food, the place of supply will be where the hotel is located.

c. Reverse Charge Mechanism (RCM):