CHAPTER-5 PLACE OF SUPPLY OF GOOD OR SERVICES OR BOTH

SECTION-10 PLACE OF SUPPLY OF GOOD OR SERVICES OR BOTH

 SECTION AND RELEVANT RULE

(1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,–

• • where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;
  • where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person;
  • where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient;

1. 1. 1.  where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.

Explanation.—For the purposes of this clause, recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person;]^[1]

• • where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly;
  • where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board.

(2) Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed.

Reference for Amendments:-

[1] Inserted by The Integrated Goods and Services Tax (Amendment) Act, 2023 (No. 30 of 2023) dated 18.08.2023. Brought into force w.e.f. 01.10.2023.

 

ANALYTICAL REVIEW

Place of supply of goods, other than supply of goods imported into, or exported from India

Before moving on to the relevant definitions and the provisions in relation to determination of place of supply, let’s take an overview of the same:

Situation	Nature of Supply
Location of supplier is the same as place of supply	Intra-State Supply
Location of supplier is different from the place of supply	Inter-State Supply
Import/Export of Goods or Services	Inter-State Supply
Supplies to/by SEZ units or developers	Inter-State Supply

Relevant Definitions in Relation to place of Supply and its determination:

Section 2(14): Location of the recipient of services means:

• • where a supply is received at a place of business for which registration has been obtained, the location of such place of business;
  • where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment;
  • where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and
  • in absence of such places, the location of the usual place of residence of the

Section 2(15): Location of the supplier of services means:

• • where a supply is made from a place of business for which registration has been obtained, the location of such place of business;
  • where a supply is made from a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere, the location of such fixed establishment;
  • where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and
  • in absence of such places, the location of the usual place of residence of the supplier.

Section 2(85): Place of business includes:

• • a place from where the business is ordinarily carried on, and includes a warehouse, a go-down or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
  • a place where a taxable person maintains his books of account; or a place where a taxable person is engaged in business through an agent, by whatever name

Section 2(50): Fixed establishment means a place other than the place of business which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs.

Section 2(21): Supply shall have the same meaning as assigned to it in section 7 of the Central Goods and Services Tax Act.

Section 2(93): Recipient of supply of goods or services or both, means—

• • where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;
  • where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and
  • where no consideration is payable for the supply of a service, the person to whom the service is rendered,
  • and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied.

Section 2(105): Supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied.

Section 2(3): 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 stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

Explanation. –For the purposes of this clause, the term “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.

The term conveyance has been defined in section 2(34) of the CGST Act to include a vessel, an aircraft and a vehicle.

Section 2(5): Export of goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India [Section 2(5)].

Section 2(6): Export of services means the supply of any service when

• • the supplier of service is located in India,
  • the recipient of service is located outside India,
  • the place of supply of service is outside India,
  • the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
  • the supplier of service and recipient of service are not merely establishments of a distinct person in accordance with explanation 1 of section 8.

As per Explanation 1 to Section 8, the following are treated as establishments of distinct persons:

• • an establishment in India and any other establishment outside India;
  • an establishment in a State or Union territory and any other establishment outside that State or Union territory; or
  • an establishment in a State or Union territory and any other establishment being a registered within that State or Union territory

Section 2(10): Import of goods with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India.

Section 2(11): Import of services means the supply of any service, where,

• • the supplier of service is located outside India,
  • the recipient of service is located in India, and
  • the place of supply of service is in

Section 2(13) of the IGST Act: Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.

Section 2(17) of the IGST Act: Online information and database access or retrieval services means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as, ––

• • advertising on the internet;
  • providing cloud services;
  • provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
  • providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
  • online supplies of digital content (movies, television shows, music and the like);
  • digital data storage; and
  • online gaming [Section 2(17)].

Section 2(56): India means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976, and the air space above its territory and territorial waters.

Section 10 of the IGST Act deals with provisions relating to determination of place of supply of Goods in relation to domestic transactions.

A gist of various provisions covered under this section have been provide below:

Section	Situation
10(1)(a)	Supply involving movement of Goods, either by the supplier or the recipient.
10(1)(b)	Goods being delivered by the supplier to the recipient on the direction of a third person.
10(1)(c)	Supply does not involve movement of Goods either by the supplier or the recipient.
10(1)(ca)	Place of supply is address of person when goods supplied to unregistered person
10(1)(d)	Goods are assembled or installed at site.
10(1)(e)	Goods supplied on board a conveyance (vessel, aircraft, train or motor vehicle).
10(2)	Residual provision where the place of supply cannot be determined on the basis of the above provisions.

• Sec 10(1)(a):

Where movement of goods is involved either by the supplier or the recipient.

Place of supply would be the location of the goods at the time at which the movement of goods terminated for delivery to the recipient.

Let’s understand this with the following illustration:

Example:

The Location of the Supplier ‘A’ is Delhi. The place of supply and nature of supply shall be as under:

Recipient	Place of Supply	Nature of Supply
Registered in Gurgaon	Gurgaon	Inter-state Supply
Unregistered but address provided to the Supplier as  Noida	Noida	Inter-state Supply
Unregistered. Collects the delivery of goods from the Supplier without giving his address	Delhi	Intra-state Supply

Understanding the above subsection by analyzing different scenarios:

No.	Scenario	Solution
1.	Where the supplier undertakes to deliver the goods at the premises of the recipient:	The place of supply shall be the location of the premises of the recipient.
2.	Where the recipient himself undertakes the movement of goods to his premises.	The place of supply shall be the location of the premises of the recipient.
3.	Goods collected at the showroom by a registered recipient	The registered recipient gives the address of the registered place of business and the movement of goods is caused by the recipient to such place, therefore the place of supply would be the location of the registered place of business, where the movement terminates.
4.	Goods collected at the showroom by an unregistered recipient i.e., customer	Case A: where the recipient states the address for delivery same as the location of the showroom, the place of supply would be the location of showroom because as per the supplier the movement of goods terminates then and there. Case B: where the recipient mentions the address for delivery as some location other than the location of the showroom, the place of supply would be the address for delivery mentioned on the invoice because the recipient causes movement of goods to such address.

Illustration for the above-mentioned Case Scenarios:

Case Scenario 1:

‘A’ of UP places an order of books on “B” of Delhi with an instruction to deliver the books at

the location of ‘A’ in UP.

Solution:

Since the goods will be moving from Delhi to UP, it involves movement of goods and hence, the place of supply will be the location where the movement terminated for delivery i.e., UP.

Another Example: A person from Gujarat comes to Mumbai and purchases goods. He declared his Gujarat GSTIN, arranges transport himself and takes goods to Gujarat. The place of supply would be Gujarat in this case.

Case Scenario 2:

Dealer ‘X’ in Mumbai sold some goods to Dealer ‘Y’ in Haryana. As per the contract, Dealer ‘Y’ is required to take delivery of goods from the premises of Dealer ‘X’ in Mumbai and arrange transportation by himself.

In this case, the place of supply of goods would be ‘Haryana’, where the movement of goods terminates for delivery to the recipient irrespective of supplier delivered the goods in Mumbai. In the given case, movement is caused by the recipient which is also covered under sec 10(1)(a) of the IGST Act.

Case Scenario 3:

Dealer ‘D’ of Delhi went on an official visit to Mumbai, from where he purchased a printer and other computer accessories from Dealer ‘E’ for official purpose. Dealer ‘E’ handed over the goods to Dealer ‘D’ in Mumbai itself, however, the billing address and GSTIN as given by Dealer ‘D’ was his official address i.e., address of Delhi.

In this case as the movement of goods is caused by Dealer ‘D’ to his registered place of business, therefore the place of supply would be the location of the registered place of business, where the movement terminates.

Case Scenario 4:

Mr. C a resident of Haryana purchased a mobile phone from a Dealer in Delhi. The dealer handed over the mobile phone to Mr. C at the show room:

Case A: The place of supply shall be Delhi where the address of delivery entered by the supplier is Delhi as according to the supplier the movement of goods has terminated at the showroom in Delhi itself.

Case B: The place of supply may be Haryana where supplier mentions the address for delivery in his invoice as Haryana as the movement of goods as checked by supplier (address of Mr. A) terminates for delivery to the recipient in Haryana.

Judicial Pronouncements

1. Inter State Supply in case of ex-factory sales where movement of goods terminates in other state

AAR Telangana in Re: Penna Cement Industries Ltd. as cited in 2020 Taxo.online 1096

In case of ex-factory sales, since the delivery of goods to recipient takes place at factory gate so far as supplier is concerned, location of the supplier’s factory can be reckoned as POS. However, section 10(1)(a) perceptibly indicates that the movement can be affected by the supplier or by the recipient or by any other person authorized by the recipient. Thus, movement of goods in case of ex-factory inter-State sales does not conclude at factory gate but terminates at the place of destination where the goods finally are destined as per the billing address. The ‘location of supplier’ and the ‘place of supply’ fall under different states and the supply qualifies as inter-State supply. IGST chargeable.

2. Supply to SEZ under E-Auction amounts to inter-state ‘zero-rated supply’

Kerala HC in Lalitha Muraleedharan v. The Range Forest Officer as cited in 2019 Taxo.online 546

In this case, the taxpayer is engaged in the manufacturing of natural and essential oils, food supplements, aromatic chemicals, etc. from an industrial unit located in the Madras Export Processing Zone. The said industrial unit is a notified Special Economic Zone (SEZ), i.e., 100% export-oriented unit.

The taxpayer had participated in the e-auction of sandalwood conducted by the Government Sandal Depot, Marayoor (Kerala). In the same case the high court of Kerala was of the view that the petitioner upon completion of other sale conditions receives the goods at the premises of the supplier, and the acknowledgment of goods at supplier’s premises does not result in termination of movement of goods but results in further movement of goods at the hands of recipient to his location. So, the final destination is the location of the recipient i.e., SEZ therefore the supply should be termed to be an inter-state supply. As per sec 10(1)(a), it also indicates the supply can be affected by supplier or the recipient or by any other person, the place of supply shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient.

Sec 10(1)(b):

Goods being delivered to the recipient by the supplier on the direction of a third person, before or during movement of goods

It shall be deemed that the third person has received the goods therefore the place of supply of such goods shall be the principal place of business of such person (third person)

Section 10(1)(b) of IGST Act covers supply before or during movement of goods by transfer of documents or otherwise. In case of such sale, it shall be presumed that the billing address (address of the third person on whose direction the goods are sent) shall be the place of supply of goods. Thus, if supplier and billing address (address of the third person on whose direction the goods are sent) are in different States, the supply will be inter-state even if goods are delivered in the same State on direction of the third party.

Bill to Ship to Transactions:

Under “Bill to Ship to Mode” of supply, there are three persons involved in a transaction:

• • “A” is the person who has ordered “B” to send goods directly to “C”
  • “B” is the person who is sending goods directly to “C” on behalf of “A”
  • “C” is the recipient of goods.

For example:-

”B”, a dealer in automobile goods, located in Maharashtra receives an order from “A”, located in Gujrat. The order is for the supply of 5,000 qty of automobile part, with an instruction to ship these goods to “C” (Customer of “A”), located in Karnataka.

In this case Bill to party will be “A”. and ship to party will be “C”.

First transaction: In case of first transaction (between B. and A), provisions of sec 10(1)(b) of the IGST Act will be applicable and accordingly, place of supply shall be principal place of business of third person i.e., A.

Second transaction: In case of second transaction (between A and C), provisions of sec 10(1)(a) of the IGST Act will be applicable and accordingly, place of supply shall be location of goods where movement terminates for delivery.

Based on the above, a summarized table for further clarification is given below:

Supplier	Bill to (Third party)	Ship to (Recipient)	Place of Supply	GST
Maharashtra	Maharashtra	Maharashtra	Maharashtra	CGST+SGST
Maharashtra	Karnataka	Maharashtra	Karnataka	IGST
Maharashtra	Maharashtra	Karnataka	Maharashtra	CGST+SGST
Maharashtra	Karnataka	Karnataka	Karnataka	IGST

Example:

Mr. X (a supplier registered in Uttar Pradesh having principal place of business at Noida) asks Mr. Y of Ahmedabad, Gujarat to deliver 50 washing machines to his buyer Mr. Z at Jaipur, Rajasthan.

In this case, two supplies are involved, one between Mr. X and Mr. Z and other between Mr. Y and Mr. X. While the former supply is covered under clause (a) of section 10(1), the latter one i.e., between Mr. Y and Mr. X is covered under clause (b) of section 10(1). Accordingly, in this case, the place of supply of goods is not the location of delivery of such goods (Jaipur) but the principal place of business of third person i.e., principal place of business of Mr. X located at Noida.

Judicial Pronouncements

3. Bill to Ship to Mode not limited to only three parties

AAR Rajasthan in Re: Sanjog Steels Pvt. Ltd. as cited in 2018 Taxo.online 658

The applicant sells the manufactured goods under the brand name Rathi Powertech to M/s RSE. M/s RSE would then sell the said goods after adding its margin of about Rs. 50 per metric tonne to M/s Goyal. M/s Goyal would then sell the said products to various customers (hereinafter referred to as “M/s X”) as per the demand of market. The manufactured goods would be directly dispatched from the applicant to M/s X and the e-way bill would be prepared on a “Bill to Ship to” model as per the provisions of sec 10(1)(b) of the IGST Act. It is stated that the Applicant is an associate company of M/s Goyal. It is further submitted that the transactions are with value addition and the last transactions is with unrelated party and complying with the provisions of Section 15(1) of the CGST Act, 2017.

It is observed from the submissions made by the applicant, that the cycle of supply of goods from the applicant to the final customer, involves four persons, i.e. the applicant, M/s RSE/RPG, M/s Goyal and M/s X.

Sec 10(1)(b) of IGST Act does nowhere limit the transaction to only three parties/persons. It only contemplates about role of ‘third party’ and declaration of ‘principal place of businesses. Therefore, the supply from M/s SSPL to M/s X on a “Bill to Ship to” mode as per provisions of sec 10(1)(b) of IGST Act is permissible

4. ITC of IGST paid in Bill-to-ship-to model, available

AAR Rajasthan in Umax Packaging as cited in 2018 Taxo.online 657

The applicant is engaged in manufacture of plastic pouches in Jodhpur and is registered under GST. The applicant proposes to purchase goods from a supplier in Guwahati and will further supply the said goods to another party in Guwahati. The applicant will direct the supplier in Guwahati to deliver the goods to the other party at Guwahati.

The applicant proposes to purchase goods from supplier ‘U’ at Guwahati and further supply the said goods to another party ‘P’ at Guwahati. The transaction between ‘U’, Guwahati, applicant and ‘P’ is a case of ‘bill to-ship to’.

The applicant filed the instant application seeking advance ruling on the admissibility of input tax credit (ITC) of IGST charged by the supplier in Guwahati to the applicant i.e., whether ITC of IGST paid on ‘bill to-ship to’ model is admissible to the applicant?

As per section 10 (1) (b) of IGST where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. So, in the instant case, applicant is acting as a third party, directing ‘U’, Guwahati to dispatch the goods directly to ‘P’, Guwahati. ‘U’, Guwahati would accordingly ‘bill to’ the applicant and ‘ship to’ ‘P’, Guwahati.

As per Section 16 (2) (b) of the CGST Act, every registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both where he has received the goods or services or both.

For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise.

As per the cited provisions, it is deemed that the applicant has received the goods from ‘U’, Guwahati and thereafter the said goods are dispatched to ‘P’, Guwahati.

In view of the foregoing, it is ruled that the applicant at Jodhpur is eligible to claim the input tax credit (ITC) of IGST paid on ‘bill to-ship to’ model as per the relevant provisions of sections 16 of CGST Act, 2017

Supply of air conditioner on behalf of third person outside state- constitutes an inter-state supply

AAR GOA in Re: High Tech Refrigeration & Air Conditioning industries as cited in 2020 Taxo.online 1095

Supply of air conditioner and other installation services for a client (Recipient) registered outside Goa but not registered in Goa to the person located in Goa is to be treated as supply made in the course of inter-state supply and tax to be charged accordingly. Section 10(1)(b) of IGST Act is reproduced as “where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person.”

Sec 10(1)(c):

When movement of goods is not involved, whether by supplier or by recipient

The place of supply shall be the location of such goods at the time of deliver to the recipient

Example:

XZ Ltd. (Mumbai, Maharashtra) opens a new branch office at Gurugram, Haryana. It purchases a building for office from KTS Builders (Gurugram). It also enters into a separate contract with KTS Builders for purchase of pre-installed office furniture and fixtures in the building. Though there will be no GST liability on purchase of building (para 5 of Schedule III to CGST Act), office furniture and fixtures will be liable to GST. Since there is no movement of office furniture and fixtures, the place of supply of such goods is their location at the time of delivery to the recipient (XZ Ltd.) i.e., Gurugram.

Example:

A generator lying in the basement of a building purchased by the tenant and being left behind at the time of terminating the tenancy, the supply of the generator by the tenant to the landlord for an agreed price is a case of ‘supply that does not involve movement of the goods.

In such cases, the place of supply will be where the generator is located at the time of supply.

Section 10(1)(ca): Place of supply relating to unregistered persons (vide The Integrated Goods and Services Tax (Amendment) Act, 2023 (No. 30 of 2023) dated 18.08.2023 w.e.f. 01.10.2023)

Where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.

Explanation.—For the purposes of this clause [i.e. section 10(1)(ca) of IGST Act], recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person.

In other words, If the goods are supplied to an unregistered person, then:

Place of supply is the address recorded in the invoice – If their address is recorded on the invoice

Place of supply is the location of the supplier – If their address is not recorded on the invoice

Relevant Circular

Circular No. 209/03/2024-GST: Clarification regarding Place of Supply(Pos) Relating to place of supply of goods to unregistered persons:

Earlier, vide Notification 02/2023-Integrated Tax dated 29.09.2023, amendment made effective in Section 10(1) of IGST Act, by inserting new clause (ca), relating to place of supply of goods, where supply made to person other than a registered person.

Vide this Circular, clarification has been issued to address and resolve the ambiguity regarding the place of supply in cases where the billing and delivery addresses of goods supplied to unregistered persons differ, particularly in e-commerce transactions.

Clarification:- When goods are supplied to an unregistered person and the billing address differs from the delivery address, the place of supply is the location as per the delivery address recorded in the invoice. Also, Suppliers should record the delivery address as the recipient’s address on the invoice when the billing and delivery addresses differ.

Sec 10(1)(d)

Where goods are assembled or installed at site

The place of supply shall be the place of such installation or assembly.

It is important to note that assembly or installation as referred to in this clause is not a ‘works contract’, which has been classified by law as a supply of services (in Paragraph 6(a) of Schedule II to the CGST Act, 2017). Works contract qualify as service, for which the place of supply is determined under section 12 and section 13 of the IGST Act, 2017.

The supply addressed in this provision refers to only a supply of goods, being a composite supply of goods along with some services, or a mixed supply treated as a supply of goods in terms of sections 2(30), 2(74) and 8 of the CGST Act.

In other words, supply from the place of their origin to the site ‘for’ assembly or installation is subsumed within this provision and merged with the supply to the recipient by virtue of such assembly or installation.

This provision appoints the place of supply based on the final act of assembly or installation.

Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly.

Example:

Chandra Shekhar from Jamshedpur orders a machine to be installed in his factory at Jamshedpur. The supplier, from Kolkata, sources the parts from various states across the country. Finally, he successfully installs the machine at Chandra Shekhar’s factory at Jamshedpur. In this case, since the machine parts were installed at Jamshedpur, the place of supply would be Jamshedpur. Such a supply attracts IGST since the location of the supplier (West Bengal) and the place of supply (Jharkhand) are different.

Example:

Pure Refineries (Mumbai, Maharashtra) gives a contract to PQ Ltd. (Ranchi, Jharkhand) to assemble a machinery in its Kutch refinery, Gujarat. The place of supply is the site of assembly of power plant i.e., Kutch even though Pure refineries is located in Maharashtra.

Place of supply when goods are assembled or installed at site
Location of the supplier (location of goods ready for supply)	Location of the recipient (regd. office of the buyer)	Site of assembly or installation	Place of supply	Inter-State or Intra-State  transaction
Haryana	Haryana	Delhi	Delhi	Inter-state
Haryana	Delhi	Haryana	Haryana	Intra-state
Haryana	Delhi	Mumbai	Mumbai	Inter-state

 Sec 10(1)(e):

Where goods are supplied on board a conveyance (vessel, aircraft, train or motor vehicle)

The place of supply shall be the location at which such goods are taken on board.

Such transactions cover the supply of goods as goods or as services, ‘by’ the operator to the passenger (or any other person), during the journey ‘in’ the conveyance.

Example:

Howrah – New Delhi Rajdhani Express supplies food during the journey from Kolkata to New Delhi. The train takes food on board at Mugalsarai in Uttar Pradesh. In this case, since the goods are taken on board in Mugalsarai, the place of supply would be Mugalsarai (Uttar Pradesh).

Example:

Refreshments are served on board a plane / we also get breakfast, lunch etc. in trains. Such refreshments, food etc. are goods supplied on board a conveyance. Hence, the location of such supplies will be the location at which such goods are taken on board where such refreshment, etc. are taken on board.

Suppose we are served sandwiches on our journey from Mumbai to Delhi, the place of supply will be Mumbai irrespective of the place of its consumption. We may consume the given sandwiches in Rajasthan, the place of supply will still remain Mumbai.

Section 10(2): Residuary Provision

Where place of supply of goods cannot be determined

The place of supply shall be determined in such manner as may be prescribed. As of now no such circumstances have come forth require separate provisions for the determination of place of supply.

Detailed and Summarized provisions of Sec 10 is tabulated below for ready reference

Sl. No.	Nature of Supply of Goods	Place of Supply
1.	Where the supply involves the movement of goods, whether by the supplier or the recipient or by any other person	Location of the goods at the time at which, the movement of goods terminates for delivery to the recipient
2.	Where the goods are delivered to the recipient, or any person on the direction of the third person by way of transfer of title or otherwise, it shall be deemed that the third person has received the goods	The principal place of business of such person
3.	Where there is no movement of goods either by supplier or recipient	Location of such goods at the time of delivery to the recipient
4.	Where goods are supplied to an unregistered person	Place of Supply as recorded in invoice – where address recorded in invoice Place of supply is location of supplier – where address not recorded in invoice
5.	Where goods are assembled or installed at site	The place where the goods are assembled or installed
6.	Where the goods are supplied on-board a conveyance like a vessel, aircraft, train or motor vehicle	The place where such goods are taken on board the conveyance
7.	Where the place of supply of goods cannot be determined in terms of sub-sections (2), (3), (4) and (5)	It shall be determined in such manner as may be prescribed

 

RELEVANT NOTIFICATIONS

Date of Issue	Notification No.	Matter
28th June, 2017	3/2017-Integrated Tax	Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017
31st December, 2017	04 /2018-Integrated Tax	Seeks to amend the IGST Rules, 2017 so as to notify the rules for determination of place of supply in case of inter-State supply under sections 10(2), 12(3), 12(7), 12(11) and 13(7) of the IGST Act, 2017.
29th September, 2023	02/2023- Integrated Tax	Seeks to notify the provisions of the Integrated Goods and Services Tax (Amendment) Act, 2023

 

Relevant Circular

Date of Issue	Circular No.	Matter
26th June 2024	209/3/2024-GST	Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply

 

 

SECTION-11 PLACE OF SUPPLY OF GOODS IMPORTED INTO OR EXPORTED FROM INDIA

 SECTION AND RELEVANT RULE

The place of supply of goods, –

(a) imported into India shall be the location of the importer;

(b) exported from India shall be the location outside India.

 

ANALYTICAL REVIEW

Place of supply of goods imported into, or exported from India

Place of supply of goods where the goods are imported into or exported from India will be determined in accordance with section 11 of the IGST Act. We have to consider movement of goods and not location of supplier or recipient, place of supply will be-

– In case of import of goods- location of importer

– In case of export of goods – location outside India where goods are exported.

Relevant Definitions under the IGST Act:

1. Section 2(5): “export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India.
2. Section 2(10): “import of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India.

Example- Import of goods-

Location of supplier	Location of goods	Goods supplied to	Location of recipient	Place of supply
Thailand	Thailand	Assam	Assam	Assam
Karnataka	Iran	Dubai	Karnataka	Not an import since goods not brought into India

Export of goods-

Location of supplier	Location of goods	Goods supplied to	Location of recipient	Place of supply
Assam	Assam	Thailand	Assam	Thailand
Maharashtra	Dubai	Iran	Iran	Not an export since the goods is not moving from India.

Judicial Pronouncements

1. No separate registration required in different states

AAR Maharashtra in Re: Gandhar Oil Refinery (India) Limited as cited in 2019 Taxo.online 1020

The applicant is an importer of non-coking coal and a manufacturer of petroleum products with Head Office/Registered Office at Mumbai. The applicant is engaged in trading activity of non-coking coal in various states and importing the said coal at various ports in India and also purchasing from dealers within India from various States. The said coal is imported at various ports situated in various States and they are registered with GST department in all such places.

With respect to the above-mentioned transactions, they have submitted that their entire transactions are done from their head office/registered office at Mumbai in Maharashtra.

It was held that since the applicant will be importing the goods into India, as per Section 7(2) of the IGST Act, 2017 such supply of goods imported into India shall be treated as supply of goods in the course of inter-State trade or commerce.

It was also stated that in respect of goods imported into India, as per Section 11(a) of the IGST Act, 2017, the place of supply shall be the location of the importer and in the present case since the importer is registered in Mumbai, the place of supply shall be Mumbai, Maharashtra.

It was further held that that the place from where the applicant makes a taxable Supply of Goods shall be his location, in this case, the Mumbai Head Office/Registered Office at Mumbai and even if the applicant has go-down in different states, the applicant can clear the goods on the basis of invoices issued by the Mumbai Head Office/Registered Office at Mumbai on payment of IGST in the State of Maharashtra and therefore they need not take separate registration in other states.

2. Customs warehouse can be shown as dispatch location for sending goods directly from port to customer

AAR Maharashtra in Re: Aarel Import Export Pvt. Ltd. as cited in 2019 Taxo.online 1019

Where applicant having its head office at Mumbai, Maharashtra and also registered under GST Act in State of Maharashtra. The Applicant wishes to import coal from Indonesia at Paradip Port, Odisha and sell same directly from Paradip Port Warehouse (Ex-BOND) to customers in Odisha by raising bills from Mumbai office, applicant can clear coal on basis of bills issued by Mumbai HO and it need not take separate registration in state of Odisha. Applicant is an importer, when the goods are imported into Orissa, the place of supply of goods shall be the location of importer i.e. Mumbai, Maharashtra (Section 11(a) of the IGST Act). Therefore, separate registration need not be taken in the State of Odisha. Also, the Applicant makes taxable supply of goods from Mumbai Head Office, as the Applicant doesn’t have any establishment or office in the state of Odisha. The place from where the supplier makes a taxable supply of goods shall be the place of supply i.e. Mumbai, and hence the Applicant can clear goods on the basis of invoices issued by the Mumbai head office. Further it appears to be correct to mention the GSTIN of Mumbai in the E-Way Bill and Dispatch place as Customs warehouse situated at Paradip, Odisha.

 

RELEVANT NOTIFICATIONS

Date of Issue	Notification No.	Matter
28th June, 2017	3/2017-Integrated Tax	Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017

 

 

SECTION-12 PLACE OF SUPPLY OF SEVICES WHERE LOCATION OF SUPPLIER AND RECIPIENT IS IN INDIA

 SECTION AND RELEVANT RULE

(1) The provisions of this section shall apply to determine the place of supply of services where the location of supplier of services and the location of the recipient of services is in India.

(2) The place of supply of services, except the services specified in sub-sections (3) to (14),–

• • made to a registered person shall be the location of such person;
  • made to any person other than a registered person shall be,–

1. 1. 1. the location of the recipient where the address on record exists; and
      2. the location of the supplier of services in other cases.

(3) The place of supply of services,–

• • directly in relation to an 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
  • by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel; or
  • by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; or
  • any services ancillary to the services referred to in clauses (a), (b) and (c), shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located:

Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient.

Explanation.– Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed

(4) The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed.

(5) The place of supply of services in relation to training and performance appraisal to,–

• • a registered person, shall be the location of such person;
  • a person other than a registered person, shall be the location where the services are actually performed.

(6) The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the event is actually held or where the park or such other place is located.

(7) The place of supply of services provided by way of,—

• • organisation 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
  • services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events,–

1. 1. 1. to a registered person, shall be the location of such person;
      2. to a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.

Explanation.–Where the event is held in more than one State or Union territory 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 each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed .

(8) The place of supply of services by way of transportation of goods, including by mail or courier to,––

• • a registered person, shall be the location of such person;
  • a person other than a registered person, shall be the location at which such goods are handed over for their transportation.

[***]^[1]

(9) The place of supply of passenger transportation service to,—

• • a registered person, shall be the location of such person;
  • a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey:

Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2).

Explanation.– For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time.

(10) The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey.

(11) The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall,—

• • in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or 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 the recipient of services on the record of the supplier of services;
  • in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means,––

1. 1. 1. through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or
      2. by any person to the final subscriber, be the location where such prepayment is received or such vouchers are sold;

• • in other cases, be the address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services:

Provided that where the address of the recipient as per the records of the supplier of services is not available, the place of supply shall be location of the supplier of services:

Provided further that if such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on the record of the supplier of services shall be the place of supply of such services.

Explanation.–Where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed .

(12) The place of supply of banking and other financial services, including stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services:

Provided that if the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services.

(13) The place of supply of insurance services shall,–

• • to a registered person, be the location of such person;
  • to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.

(14) The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed

Reference for Amendments:-

[1] Omitted Proviso vide The Finance Act, 2023 (No.3 of 2023) dated 31.03.2023. Prior to its omission it reads as “Provided that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods.” Brought into force w.e.f. 01.10.2023, vide Notification No. 28/2023-Central Tax dated 31.07.2023.

 

ANALYTICAL REVIEW

Place of supply of services where location of supplier and recipient is in India

Sec.12 deals with the identification of place of supply of services where the location of supplier of service and the location of the recipient of service is in India.

The term ‘services’ is defined under sec 2(102) of the CGST Act to mean “anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged”.

Further, an explanation has been inserted w.e.f. 01.02.2019, under the definition of services to explicitly provide that any facilitation or arranging transactions in securities is covered under the ambit of services in GST.

A gist of various provisions covered under this section have been provided below:

Section	Situation
12(2)	General Provision
12(3)	Place of Supply in relation to immovable property
12(4)	Place of Supply in relation to restaurant and catering services, personal grooming services, fitness, beauty treatment, etc.
12(5)	Place of Supply in relation to training and performance appraisal.
12(6)	Place of Supply in relation to admission to a cultural, artistic, sporting, scientific, educational event.
12(7)	Place of Supply in relation to organization of events specified in section 12(6).
12(8)	Place of Supply s in relation to transportation of goods.
12(9)	Place of Supply in relation to passenger transportation services.
12(10)	Place of Supply on board a conveyance.
12(11)	Place of Supply in relation to telecommunication services.
12(12)	Place of Supply in relation to banking and other financial services.
12(13)	Place of Supply in relation to insurance services.
12(14)	Place of Supply in relation to advertisement services to CG, SG etc.

• Sec 12(2)- General Provision/ Default Rule

This rule shall apply only when the supply of service does not fall in any of the specified cases provided under Section 12.

The residuary provision to determine the place of supply in respect of supply of services will be as follows:

• • Where the services are supplied to a recipient who is registered, POS will be the location of such person;
  • Where the services are supplied to a recipient who is not registered, POS will be the address-on-record of such person and where such address is not available, it will be the location of supplier.

Related Circular

31. Circular No. 242/36/2024-GST dated 31.12.2024: Clarification on place of supply of Online Services supplied by the suppliers of services to unregistered recipients

This clarification emphasizes the mandatory requirement for suppliers of online services to record the correct place of supply and the state name of unregistered recipients on invoices, ensuring compliance with the GST law.  It emphasizes that all online/digital service suppliers, including OIDAR service providers and electronic commerce operators, must adhere to the requirements for recording and reporting recipient details. Non-compliance could attract penalties, and suppliers are encouraged to establish systems to ensure proper invoicing and reporting.

• • Mandatory Recording of the Recipient’s State Name on Tax Invoices: The name of the State of the unregistered recipient must be recorded on the tax invoice, irrespective of the value of the supply.
  • Impact on Place of Supply:  Recording the recipient’s State name on the invoice is treated as the address on record. Under Section 12(2)(b)(i) of the IGST Act, the place of supply for these services is deemed to be the location of the recipient.
  • Supplier Obligations:  Suppliers must implement mechanisms to collect and record the recipient’s State name before making supplies. The recorded State name serves as the deemed address of the recipient for GST compliance.
  • Penalties for Non-Compliance: Failure to include mandatory particulars, such as the recipient’s State name, on tax invoices can result in penal action under Section 122(3)(e) of the CGST Act.
  • Filing and Reporting: The supplier must report the recipient’s State as the place of supply in FORM GSTR-1/1A for outward supplies.

Example:

M/s ABC enterprises, a supplier of services based in Goa rendering professional services to XYZ Ltd. a company registered in GST for their office in Delhi. Here, the place of provision of services shall be Delhi i.e., location of recipient of service.

Example:

Ram & Co., chartered accountants having its office in Mumbai, entered into a contract for conducting GST audit of Sham Ltd., a company having presence in 6 states with head office (HO) in Delhi. The contract was entered to undertake GST audit for only four states namely Haryana, Chandigarh, Punjab and Gujarat. The bill is to be raised in the name of Delhi HO of Sham Ltd.

In this case, Mumbai office staff of Ram & Co., will visit different states’ offices of XYZ Ltd. for conducting audit. But, the place of supply of services will continue to be the location of the recipient i.e., Delhi HO of Sham Ltd., as per the contract with Delhi HO of Sham Ltd., irrespective of activities being carried out in different states. Accordingly, IGST will be charged.

Example:

Mr. Akash, a Chartered Accountant in Gurugram, Haryana, (registered in Haryana) provides consultancy services to his client Mr. Dheeraj who is a resident of New Delhi but is not registered under GST. If the address of Mr. Dheeraj is available in the records of Mr. Akash, location of Mr. Dheeraj, i.e., New Delhi will be the place of supply, else the location of Mr. Akash, which is Gurugram, will be the place of supply

• Sec 12(3): Services in relation to immovable property

The place of supply in case of services directly in relation to immovable property will be the location of such property. The expression ‘in relation to’ includes a wide range of services that have an immediate connection with the immovable property. Also, the location of the supplier or recipient is irrelevant in such cases.

Immovable Property: An immovable property is an immovable object, a property that cannot be moved without destroying or altering it. It is fixed to the earth, such as a piece of land or a house.

Immovable property includes premises, property rights (for example, inheritable building right), houses, land and associated goods, and chattels if they are located on, or below, or have a fixed address.

Nature of supply	Place of supply
(a)     Services directly in relation to an immovable property, including services provided by: •   architects, •   interior decorators, •   surveyors, •   engineers •   other related experts; or •   estate agents,	Location at which the immovable property or boat or vessel is located or intended to be located
(b) services by way of grant of rights to use immovable property, for carrying out or co-ordination of construction work
(c)     Services by way of lodging accommodation by a hotel, inn, guest house, homestay, club or campsite, including a house boat or any other vessel
(d)     Services by way of accommodation in any immovable property for organizing any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property
(e)     Any services ancillary to the services referred above
Proviso: Where the location of immovable property or boat or    vessel is located or intended to be located outside India.	Place of supply shall be the location of the recipient.

Illustrations:

1. ABC Builders (Haryana) in constructing a factory building for Y2K Pvt. Ltd. (Rajasthan) in New Delhi. The place of supply is the location of the immovable property i.e., New Delhi.
2. Mr. Javed, an architecture based in Mumbai renders his professional services to draw a plan for a high-rise building for Mrs. Pooja of Gurugram. The building is located in Canada. Since the immovable property is located outside India, the place of supply of service is the location of the recipient i.e., Gurugram, Haryana and not the place where the immovable property is located (Canada)

To summarize the above provisions:
Nature of Supply	Location of Immovable Property/ boat/ vessel	Place of Supply
Supply of services relating to immovable property or lodging accommodation in a hotel/ boat/ vessel or accommodation in an immovable property for social/ business/ religious/ cultural functions.	In India	Location of such immovable property/ boat or vessel
	Outside India	Location of the recipient.

Note: As per the explanation to sec 12(3) If the immovable property (or boat/vessel) is located in more than one State then all the states will be considered as place of supplies in proportion in value of services as per the contract and in absence of such contract, on such other basis as may be prescribed (in the said rule 4 of IGST Rules). The states will share GST in proportion to the value of services.

• Manner of determining proportionate value of supply in absence of any contract

Notification no 4/2018- IGST Dated 23-12-2018

In order to determine the place of supply where the immovable property is located in more than one state, Rule 4 was inserted in the IGST Act vide Notification no. 4/2018-IGST dated 23.12.2018. The said provision will be effective from 1^st january’2019.

The summary of Rule 4 has been provided in the below table for ready reference:

SR. NO.	TYPE OF SERVICE IN RELATION TO IMMOVABLE PROPERTY	FACTOR WHICH DETERMINES THE PROPORTIONATE VALUE OF SERVICE
(a)	· Service provided by way of lodging accommodation by hotel, inn, guest house etc. (other than the cases where such property is a single property located in 2 or more contiguous States/ UT or both) · Services ancillary to services specified above	Number of nights stayed in such property [Refer Example 1]
(b)	· All other services provided in relation to immovable property including services by way of accommodation in  any immovable property for organising any marriage or reception etc. · Supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called where such property is a single property located in 2 or more contiguous States or/and UT · Services ancillary to services mentioned above	Area of the immovable property lying in each State/ UT [Refer Example 2]
(c)	· Services by way of lodging accommodation by a house boat or vessel and · its ancillary services	Time spent by the boat or vessel in each such State/ UT, to be determined on the basis of declaration made by the service provider [Refer Example 3]

EXAMPLE 1:

A hotel chain X charges a consolidated sum of Rs.30,000/- for stay in its two establishments in Delhi and Agra, where the stay in Delhi is for 2 nights and the stay in Agra is for 1 night. The place of supply in this case is both in the Union territory of Delhi and in the State of Uttar Pradesh and the service shall be deemed to have been provided in the Union territory of Delhi and in the State of Uttar Pradesh in the ratio 2:1 respectively. The value of services provided will thus be apportioned as Rs. 20,000/- in the Union territory of Delhi and Rs. 10,000/- in the State of Uttar Pradesh.

EXAMPLE 2:

There is a piece of land of area 20,000 square feet which is partly in State S1 say 12,000 square feet and partly in State S2, say 8000 square feet. Site preparation work has been entrusted to T. The ratio of land in the two states works out to 12:8 or 3:2 (simplified). The place of supply is in both S1 and S2. The service shall be deemed to have been provided in the ratio of 12:8 or 3:2 (simplified) in the States S1 and S2 respectively. The value of the service shall be accordingly apportioned between the States.

EXAMPLE 3:

A company C provides the service of 24 hours accommodation in a houseboat, which is situated both in Kerala and Karnataka in as much as the guests board the house boat in Kerala and stay there for 22 hours but it also moves into Karnataka for 2 hours (as declared by the service provider). The place of supply of this service is in the States of Kerala and Karnataka. The service shall be deemed to have been provided in the ratio of 22:2 or 11:1 (simplified) in the states of Kerala and Karnataka, respectively. The value of the service shall be accordingly apportioned between the States.

EXAMPLE: SERVICES RECEIVED AT MORE THAN ONE ESTABLISHMENT

EXAMPLE: ACCOMODATION FOR ORGANIZING ANY FUNCTION

Example:

A company in Haryana contracts with a Haryana based architect to design a structure for their new office in Singapore. Here, as the immovable property is located in Singapore (outside India), place of supply shall be the location of recipient i.e., Haryana, as per proviso to sec 12(3) of the IGST Act.

• Clarification regarding determination of place of supply in certain cases

Circular no 103/22/2019- GST dated 28-06-2019

Services by port authorities’ w.r.t. cargo handling

S. No.	Issue	Clarification
1	Various services are being provided by the port authorities to its clients in relation to cargo handling. Some of such services are in respect of arrival of wagons at port, haulage of wagons inside port area up-to place of unloading, siding of wagons inside the port, unloading of wagons, movement of unloaded cargo to plot and staking hereof, movement of unloaded cargo to berth, shipment/loading on vessel etc. Doubts have been raised about determination of place of supply for such services i.e., whether the same would be determined in terms of the provisions contained in sub-sec (2) of sec 12 or sub-sec (2) of sec 13 of the IGST Act, as the case may be or the same shall be determined in terms of the provisions contained in sub-sec (3) of sec 12 of the IGST Act.	It is hereby clarified that such services are ancillary to or related to cargo handling services and are not related to immovable property. Accordingly, the place of supply of such services will be determined as per the provisions contained in sub-sec (2) of sec 12 or sub-sec (2) of sec 13 of the IGST Act, as the case may be, depending upon the terms of the contract between the supplier and recipient of such services.

• Section 12(4): Place of Supply of specified performance-based services

Illustrations:

1. An Advertisement Company of Jaipur, Rajasthan contracts with a beauty salon firm of Jaipur for dressing and beauty work upon their models in Mumbai. According to section 12 (4) the place of supply shall be where the services are provided. In this example the place of supply is Mumbai where the dressing and beauty-work done. Transaction between the Advertisement Company and the Beauty Saloon Firm is inter-state transaction because the location of the supplier and place of supply are in differ states.
2. Mr. Raj, a businessman from Kolkata, dines in a restaurant in Delhi while on a business trip. The place of supply in this case would be the location of the restaurant i.e., Delhi where the services are actually performed.

• Sec 12(5): Place of supply of training and performance appraisal services

Note: Recipient here being the ‘person liable to pay the consideration’ is not to be misconstrued to be the ‘trainee’ or ‘person appraised’. E.g.: In case of a corporate training organized by a training institute in Mumbai for a registered corporate client in Bangalore, the consideration is paid by the corporate through the individual participants who would be required to pay a certain delegate fee. Hence, the POS has to be determined on the basis of location of the recipient being the corporate entity and not based on the place where the services are actually performed.

Example:

Aaryan Consultants (Delhi) impart GST training to accounts and finance personnel of KMT Cements Ltd. (Gurugram, Haryana) at the company’s Delhi office. Since the recipient is registered, the place of supply is the location of the registered person i.e., Gurugram, Haryana.

Example:

Mr. Ramesh (unregistered person based in Noida) signs up with Excellent Linguistics (New Delhi) for training on English speaking at their New Delhi Centre. Since the recipient is unregistered, the place of supply is the location where services are provided i.e., New Delhi.

• Sec 12(6): Place of supply for admission to events

Services ancillary to admission to an event

There can be many services which are ancillary to admission to an event like a service of hiring a specific equipment to enjoy the event at the venue (against a charge that is not included in the price of entry ticket) is an example of a service that is ancillary to admission.

Services not ancillary to admission to an event

A service of courier agency used for distribution of entry tickets for an event is an example of a service that is not ancillary to admission to the event.

Illustrations:

1. Mr. Rakesh, a resident of Dehradun, Uttarakhand, buys a ticket for a circus organized at Gurugram, Haryana by a circus company based in New Delhi. The place of supply is the location where the circus is held i.e., Gurugram.
2. Anil of Ludhiana buys a ticket for an amusement park located in Gurugram, Haryana. The place of supply is the location, where the park is located i.e., Gurugram, Haryana.

• Sec 12(7): Place of supply for organising events and assigning sponsorship

Service ancillary to organisation of an event

There can be many services which are ancillary to organisation of an event like a provision of sound engineering for an artistic event is a pre-requisite for staging of that event and should be regarded as a service ancillary to its organization.

Note:

If the event is held in more than one State/ UT and a consolidated amount is charged for services relating to such event, the place of supply of such service is deemed to be in each of the respective State/ UT in proportion to the value of services determined in terms of the contract or agreement entered into in this regard. In the absence of any such contract or agreement, the value is determined in accordance with rule 5 of the IGST Rules.

•  Manner of determining proportionate value of supply in absence of any contract

Notification no 4/2018- IGST Dated 23-12-2018

In order to determine the place of supply in relation to organisation of an event in more than one state, Rule 5 was inserted in the IGST Act vide Notification no. 4/2018-IGST dated 23.12.2018. The said provision is effective from 1^st January’2019.

The summary of Rule 5 has been provided in the below table for ready reference:

Nature of Supply	Place of Supply
Where the above-mentioned services are supplied to a person to an unregistered person, and the event is held in more than one state or UT in India, and a single amount is being charged for such supply of services:	The place of supply in the absence of any contract or agreement between the parties, will be determined on the basis of generally accepted accounting principles.

Illustration: An event management company E has to organise some promotional events in States S1 and S2 for a recipient R. 3 events are to be organised in S1 and 2 in S2. They charge a consolidated amount of Rs.10,00,000 from R. The place of supply of this service is in both the States S1 and S2. Say the proportion arrived at by the application of generally accepted accounting principles is 3:2. The service shall be deemed to have been provided in the ratio 3:2 in S1 and S2 respectively. The value of services provided will thus be apportioned as Rs. 6,00,000/- in S1 and Rs. 4,00,000/- in S2.

Judicial Pronouncements

• Event management support services provided to registered person outside state will be inter-state supply

AAR Goa in Grasshopper Production (2018)

Grasshopper Production is a service provider of event management to the clients in film shooting industry and providing location for shootings as per the requirement of the clients. The services Include arranging locations for film shooting, transport and conveyance for clients, restaurant food service, hotel accommodation, manpower requirements, security agency services, plant and machinery, furniture and pendals. All these services are procured from the supplier within the state of Goa in the name of the applicant on payment of CGST and SGST wherever applicable from the company accounts and charged their clients for cost of supply of such Event Management.

the applicant has provided service of event management to Gallani Enterprises who is registered in Mumbai and as per the provision of section 12(7)(i) the place of supply of service in case of registered person shall be the location of recipient of such services and hence, 18% IGST is applicable on such transaction.

Illustrations:

1. Bella Events, an event management company in Rajasthan, organizes an award function for Khemchandani Cloth Merchants of Ahmedabad (registered in Gujarat), in Singapore. Since the recipient is a registered person, the place of supply is the location of the recipient, i.e., Ahmedabad.
2. Glenville Planners (Dehradun) is hired by Mr. Mittal (unregistered person based in Gurugram) to plan and organise his wedding in Rajasthan. The recipient being an unregistered person, the place of supply is the location where the event is held, i.e., Rajasthan.
3. Bliss Wedding Planners (New Delhi) is hired by Mr. Kapoor (unregistered person based in Uttar Pradesh) to plan and organise his wedding in Bali. The recipient being an unregistered person and the event held outside India, the place of supply is the location of the recipient, i.e., Uttar Pradesh and not the location where the event is held, i.e., Bali.

• Sec 12(8): Place of Supply in case of transportation of Goods:

1. Services provided by way of transportation of goods, including by mail or courier to a registered person – Place of Supply shall be location of such person
2. Services provided by way of transportation of goods, including by mail or courier to unregistered person – Place of supply shall be  location at which such goods are handed over for their transportation

Further, vide IGST Amendment Act, 2018 w.e.f. provided that where the transportation of goods is to a place OUTSIDE INDIA – place of supply shall be the place of destination of such goods. However, this provision has been omitted vide The Finance Act, 2023 (No.3 of 2023) dated 31.03.2023.w.e.f. 01.10.2023. 

This amendment specifies the place of supply, irrespective of destination of the goods, place of supply shall fall in India in cases where the supplier of services and recipient of services are located in India. Therefore, If supplier and recipient of service are in same State, CGST and SGST/UTGST will be payable and if in different States, IGST will be payable from 1-10-2023.

Also, amendment has also been made under section 13(9) of IGST Act, 2017 which provides the Place of Supply of services of transportation of goods, other than by way of mail or courier, where location of supplier or location of recipient is outside India. This Sub-section has also been omitted vide The Finance Act, 2023 (No.3 of 2023) dated 31.03.2023.w.e.f. 01.10.2023. Therefore, after 01.10.2023, place of supply of services in case of transportation of goods, other than by way of mail or courier would be covered under default provision of Section 13(2) of IGST Act and would be the location of the recipient of services.

• Clarification on the entitlement of input tax credit where the place of supply is determined in terms of the proviso to sub-section (8) of section 12 of the Integrated Goods and Services Tax Act, 2017

Vide this circular, the Board clarifies the issues w.r.t. the supply of services by way of transportation of goods, including by mail or courier, where the transportation of goods is to a place outside India, and where the supplier and recipient of the said supply of services are located in India, the place of  supply is the concerned foreign destination where the goods are being transported. This will help in reducing the ambiguities in claiming ITC pertaining to supply made in the form of export of goods through transporters. The clarifications are as under:

• These supply of services would be considered as inter-State supply in terms of sub-section (5) of section 7 of the IGST Act and IGST would be chargeable, since  the location  of  the  supplier  is  in  India  and  the place  of supply  is  outside
• The recipient of service of transportation of goods shall be eligible to avail input tax credit in respect of the IGST so charged by the supplier, subject to the fulfilment of other conditions laid down in section 16 and 17 of the CGST Act.
• The supplier of service shall report place of supply of such service by selecting State code as ‘96-Foreign Country’ from the list of codes in the drop-down menu available on the portal in FORM GSTR-1.

Illustrations:

1. Mr. Akash, an unregistered person, of New Delhi sends a courier to his brother in Lucknow, UP. The recipient being unregistered person, the place of supply is the location where goods are handed over for their transportation, i.e., New Delhi.
2. GTA Pvt. Ltd., a Goods Transportation Agency based in New Delhi, is hired by Taruna Enterprises (registered supplier in New Delhi) to transport its consignment of goods to a buyer in Dehradun, Uttarakhand. The recipient being registered, the place of supply is the location of recipient, i.e., New Delhi.
3. Karuna Pvt. Ltd., a Goods Transportation Agency based in Gurugram, Haryana, is hired by Anmol Trade Links (registered supplier in New Delhi) to transport its consignment of goods to a buyer in Haridwar, Uttarakhand. The recipient being registered, the place of supply is the location of recipient, i.e., New Delhi.
4. M/s ABC Pvt. Ltd. is a registered company in Hyderabad. It ships goods to its customer in Ontario, Canada through M/s Green Trucks Logistics, a shipping company. The goods being transported outside India, the place of supply is the location of destination of such goods, i.e., Ontario, Canada.

• Sec 12(9): Place of Supply in case of Passenger Transportation Services:

*The return journey is treated as a separate journey, even if the tickets for  onward and return journey are issued at the same time.

Illustrations:

1. Riya (registered in New Delhi) travels from Mumbai to Pune in Aircare flight. She bought the ticket from the office of Aircare registered in new Delhi. The place of supply is the location of the recipient i.e., New Delhi.
2. Ms. Nidhi, an unregistered person, based in Saharanpur, UP books a two-way air journey ticket from Dehradun to Delhi on 10^th October. She leaves Dehradun on 15^th October in a late-night flight and lands in Delhi the next day. She leaves Delhi on 20^th October in a morning flight and lands in Dehradun the same day.

The return journey is treated as a separate journey, even if the tickets for onward and return journey are issued at the same time. Thus, being an unregistered person, the place of supply for the outward and return journeys are the locations where the unregistered person embarks on the conveyance for the continuous journey, i.e., Dehradun and Delhi respectively.

• Sec 12(10): Place of supply in case of services provided on board a conveyance

Illustration:

1. Mr. Naveen is travelling from Mumbai to Kolkata in Air care flight. He desires to watch a movie on the flight after making the payment. The Place of supply of such service of ‘movie on demand’ will be the first scheduled point of departure i.e., Mumbai.

• Sec 12(11): Place of Supply in case of Telecommunication Services including data transfer, broadcasting, cable and direct to home television services:

Nature of Supply	Place of Supply
services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna	location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services
Where mobile connection for telecommunication and internet services are provided on post-paid basis	location of billing address of the recipient of services on the record of the supplier of services
Where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means	Through selling agent or a re-seller or a distributor  of subscriber identity module card or re-charge  voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply by any person to the final subscriber, be the location where such pre-payment is received or such vouchers are sold
other cases	address of the recipient as per the records of the supplier of services where such address is not available, the place of supply shall be location of the supplier of services.

Proviso to Section 12(11):

1.       Where the address of the recipient as per the records of the supplier of services is not available, the place of supply shall be location of the supplier of services.

2.      If pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on the record of the supplier of services shall be the place of supply of such services.

• Manner of determining proportionate value of supply in absence of any contract

Notification no 4/2018- IGST Dated 23-12-2018

In order to determine the place of supply of services relating to a leased circuit where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for the supply of these services, Rule 6 was inserted in the IGST Act vide Notification no. 4/2018-IGST dated 23.12.2018. The said provision is effective from 1^st January’2019.

Where there is no contract or agreement between the supplier of service and recipient of services for separately collecting or determining the value of the services in each of the State or Union territory, the place of supply shall be determined as per the no. of points lying in the state of union territory.

The number of points in a circuit will be determined as under:

Point of Circuit	Number of points
Circuit between two points or places	Starting point and end point will constitute two points.
Intermediate point	Shall be counted as a point provided that the benefit of the leased circuit is also available at that intermediate point.

Illustration 1: A company T installs a leased circuit between the Delhi and Mumbai offices of a company C. The starting point of this circuit is in Delhi and the end point of the circuit is in Mumbai. Hence one point of this circuit is in Delhi and another in Maharashtra. The place of supply of this service is in the Union territory of Delhi and the State of Maharashtra. The service shall be deemed to have been provided in the ratio of 1:1 in the Union territory of Delhi and the State of Maharashtra, respectively.

 Illustration 2: A company T installs a leased circuit between the Chennai, Bengaluru and Mysuru offices of a company C. The starting point of this circuit is in Chennai and the end point of the circuit is in Mysuru. The circuit also connects Bengaluru. Hence one point of this circuit is in Tamil Nadu and two points in Karnataka. The place of supply of this service is in the States of Tamil Nadu and Karnataka. The service shall be deemed to have been provided in the ratio of 1:2 in the States of Tamil Nadu and Karnataka, respectively.

 Illustration 3: A company T installs a leased circuit between the Kolkata, Patna and Guwahati offices of a company C. There are 3 points in this circuit in Kolkata, Patna and Guwahati. One point each of this circuit is, therefore, in West Bengal, Bihar and Assam. The place of supply of this service is in the States of West Bengal, Bihar and Assam. The service shall be deemed to have been provided in the ratio of 1:1:1 in the States of West Bengal, Bihar and Assam, respectively.

•  Sec 12(12): Place of supply in case of banking and other financial services:

Illustrations:

1. Arjun (Lucknow) withdraws money from Bank’s ATM in Kerala. Arjun has crossed his limit of free ATM withdrawals. Bank charges fee for ATM withdrawals. The place of supply is the location of the recipient of services in the records of the supplier, i.e., Lucknow, UP.
2. Ankita from Kanpur, Uttar Pradesh, visits a bank registered in Mumbai, Maharashtra for getting a demand draft made. Ankita does not have any account with the said bank. Therefore, since the location of recipient is not available in the records of the supplier, the place of supply is the location of the supplier of services, i.e., Maharashtra.

• Sec 12(13): Place of supply in case of Insurance Services:

Illustration:

1. Mr. Jatin, proprietor of a company registered in New Delhi, buys insurance cover for the fixed assets of the company located in New Delhi from FA Insurers registered in Uttar Pradesh. The place of supply is the location of the registered recipient, i.e., New Delhi.
2. Sangeeta (unregistered resident of Haryana) goes to her hometown in Saharanpur, UP and buys a medical insurance policy for her parents there from Medical Insurers, UP (registered in UP). The place of supply is the location of the recipient of services in the records of the supplier, i.e., Saharanpur, UP.

• Sec 12(14): Place of supply in case of advertisement services to Government:

*The value of supplies specific to each State/Union territory shall be attributable to such states or union territories as per the terms of the contract or agreement entered into in this regard.

Where there is no contract or agreement between the parties to decide the portion attributable to each state or union territory, the same shall be determined on the basis of Rule 3 of IGST Rules’2017:

Sr. No.	Nature of Supply/ Type of Advertisement	Manner of Determination of amount attributable to each state or UT.
1.	Newspapers and Publications (Illustration 1)	Amount payable for publishing an advertisement in the newspaper or publications, published in each state or UT.
2.	Printed material like pamphlets, leaflets, diaries, calendars, T-shirts, etc. (Illustration 2)	Amount payable for the distribution of number of such material in each state or UT.
3.	Hoardings other than those of trains (Illustration 3)	Amount payable for the hoardings located in each state or UT.
4.	Advertisement placed on Trains (Illustration 4)	Amount payable on the basis of ratio of length of the railway track in each state of UT.
5.	Advertisement on back of Utility bills of oil and gas companies etc.	Amount payable for the advertisements on bills pertaining to consumers having billing addresses in such States or UT.
6.	Advertisement on Railway Tickets (Illustration 5)	Amount payable on the basis of the ratio of railway stations in each state or UT.
7.	Advertisement over Radio Stations (Illustration 6)	Amount payable to such radio stations which by virtue of its name is a part of a state or UT.
8.	Advertisement on Television Channels (Illustration 7)	Amount payable on the basis of viewership of such channel in each of such State/ Union territory which shall be derived as under: (a)   Viewership can be ascertained from the channel viewership figures published by the Broadcast Audience Research Council. (b)  Figures for the last week of a given quarter is used for calculating viewership for the succeeding quarter. (c)   Where the channel viewership figures relate to a region comprising of more than one State/UT, the viewership figures for a State/ UT of that region, is calculated in ratio of the populations of that State/UT, as determined in the latest Census. (d)  Amount payable on the basis of the ratio of the viewership figures for each State or UT.
9.	Advertisement at Cinema Halls (Illustration 8)	Amount payable to a cinema hall or screens in a multiplex, in a state or UT.
10.	Advertisement over Internet (Illustration 9)	Amount payable on the basis of internet subscriber figures of such State/ UT which shall be derived as under: (a)   internet subscriber figures published by the Telecom Regulatory Authority of India. (b)  Figures for the last week of a given quarter is used for calculating the number of Internet subscribers for the succeeding quarter. (c)   Where the internet subscribers figures relate to a region comprising of more than one State/UT, the subscribers figures for a State/ UT of that region, is calculated in ratio of the populations of that State/UT, as determined in the latest Census. (d)  Amount payable on the basis of the ratio of the subscriber figures for each State or UT.
11.	Advertisement through short messaging service (illustration 10)	Amount payable on the basis of telecom subscriber of such State/ UT which shall be derived as under: (a)   Number of telecom subscriber published by the Telecom Regulatory Authority of India. (b)  Figures for the last week of a given quarter is used for calculating the number of telecom subscribers for the succeeding quarter. (c)   Where the telecom subscribers’ figures relate to a region comprising of more than one State/UT, the subscribers for a State/ UT of that region, is calculated in ratio of the populations of that State/UT, as determined in the latest Census. (d)  Amount payable on the basis of the ratio of the subscriber figures for each State or UT.

Illustrations given in the above rule (Rue 3 of IGST Act’2017):

Illustration 1: Advertisement in Newspapers and Publications

ABC is a government agency which deals with all the advertisement and publicity of the Government. It has various wings dealing with various types of publicity. In furtherance thereof, it issues release orders to various agencies and entities. These agencies and entities thereafter provide the service and then issue invoices to ABC indicating the amount to be paid by them. ABC issues a release order to a newspaper for an advertisement on ‘Beti bachao beti padhao’, to be published in the newspaper DEF (whose head office is in Delhi) for the editions of Delhi, Pune, Mumbai, Lucknow and Jaipur. The release order will have details of the newspaper like the periodicity, language, size of the advertisement and the amount to be paid to such a newspaper.

The place of supply of this service shall be in the Union territory of Delhi, and the States of Maharashtra, Uttar Pradesh and Rajasthan. The amounts payable to the Pune and Mumbai editions would constitute the proportion of value for the state of Maharashtra which is attributable to the dissemination in Maharashtra. Likewise, the amount payable to the Delhi, Lucknow and Jaipur editions would constitute the proportion of value attributable to the dissemination in the Union territory of Delhi and States of Uttar Pradesh and Rajasthan respectively. DEF should issue separate State wise and Union territory wise invoices based on the editions.

Illustration 2: Advertisement on Printed Material like pamphlets, leaflets etc.

As a part of the campaign ‘Swachh Bharat’, ABC has engaged a company GH for printing of one lakh pamphlets (at a total cost of one lakh rupees) to be distributed in the states of Haryana, Uttar Pradesh and Rajasthan.

In such a case, ABC should ascertain the breakup of the pamphlets to be distributed in each of the three States i.e., Haryana, Uttar Pradesh and Rajasthan, from the Ministry or department concerned at the time of giving the print order. Let us assume that this breakup is twenty thousand, fifty thousand and thirty thousand respectively. This breakup should be indicated in the print order.

The place of supply of this service is in Haryana, Uttar Pradesh and Rajasthan. The ratio of this breakup i.e., 2:5:3 will form the basis of value attributable to the dissemination in each of the three States. Separate invoices will have to be issued State wise by GH to ABC indicating the value pertaining to that State i.e., twenty thousand rupees- Haryana, fifty thousand rupees- Uttar Pradesh and thirty thousand rupees- Rajasthan.

Illustration 3: Advertisement on Hoardings other than those on trains

ABC as part of the campaign ‘Saakshar Bharat’ has engaged a firm IJ for putting up hoardings near the Airports in four metros i.e., Delhi, Mumbai, Chennai and Kolkata. The release order issued by ABC to IJ will have the city wise, location wise breakup of the amount payable for such hoardings.

The place of supply of this service is in the Union territory of Delhi and the States of Maharashtra, Tamil Nadu and West Bengal. In such a case, the amount actually paid to IJ for the hoardings in each of the four metros will constitute the value attributable to the dissemination in the Union territory of Delhi and the States of Maharashtra, Tamil Nadu and West Bengal respectively. Separate invoices will have to be issued State wise and Union territory wise by IJ to ABC indicating the value pertaining to that State or Union territory.

 Illustration 4: Advertisement placed on Trains

ABC places an order on KL for advertisements to be placed on a train with regard to the “Janani Suraksha Yojana”. The length of a track in a state will vary from train to train. Thus, for advertisements to be placed on the Hazrat Nizamuddin Vasco Da Gama Goa Express which runs through Delhi, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Karnataka and Goa, KL may ascertain the total length of the track from Hazrat Nizamuddin to Vasco Da Gama as well as the length of the track in each of these States and Union territory from the website www.indianrail.gov.in.

The place of supply of this service is in the Union territory of Delhi and States of Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Karnataka and Goa. The value of the supply in each of these States and Union territory attributable to the dissemination in these States will be in the ratio of the length of the track in each of these States and Union territory. If this ratio works out to say 0.5:0.5: 2:2 :3:3:1, and the amount to be paid to KL is one lakh twenty thousand rupees, then KL will have to calculate the State-wise and Union territory wise breakup of the value of the service, which will be in the ratio of the length of the track in each State and Union territory.

In the given example the State-wise and Union territory wise breakup works out to Delhi (five thousand rupees), Haryana (five thousand rupees), Uttar Pradesh (twenty thousand rupees), Madhya Pradesh (twenty thousand rupees), Maharashtra (thirty thousand rupees), Karnataka (thirty thousand rupees) and Goa (ten thousand rupees). Separate invoices will have to be issued State wise and Union territory wise by KL to ABC indicating the value pertaining to that State or Union territory.

Illustration 5: Advertisement on Railway Tickets

ABC has issued a release order to MN for display of advertisements relating to the “Ujjwala” scheme on the railway tickets that are sold from all the Stations in the States of Madhya Pradesh and Chhattisgarh.

The place of supply of this service is in Madhya Pradesh and Chhattisgarh. The value of advertisement service attributable to these two States will be in the ratio of the number of railway stations in each State as ascertained from the Railways or from the website www.indianrail.gov.in.

Let us assume that this ratio is 713:251 and the total bill is rupees nine thousand six hundred and forty. The breakup of the amount between Madhya Pradesh and Chhattisgarh in this ratio of 713:251 works out to seven thousand one hundred and thirty rupees and two thousand five hundred and ten rupees respectively. Separate invoices will have to be issued State wise by MN to ABC indicating the value pertaining to that State.

Illustration 6: Advertisement over Radio Stations

For an advertisement on ‘Pradhan Mantri Ujjwala Yojana’, to be broadcast on a FM radio station OP, for the radio stations of OP Kolkata, OP Bhubaneswar, OP Patna, OP Ranchi and OP Delhi, the release order issued by ABC will show the breakup of the amount which is to be paid to each of these radio stations.

The place of supply of this service is in West Bengal, Odisha, Bihar, Jharkhand and Delhi. The place of supply of OP Delhi is in Delhi even though the studio may be physically located in another state. Separate invoices will have to be issued State wise and Union territory wise by MN to ABC based on the value pertaining to each State or Union territory.

 Illustration 7: Advertisement on Television Channels  

ABC issues a release order with QR channel for telecasting an advertisement relating to the “Pradhan Mantri Kaushal Vikas Yojana” in the month of November, 2017. In the first phase, this will be telecast in the Union territory of Delhi, States of Uttar Pradesh, Uttarakhand, Bihar and Jharkhand.

The place of supply of this service is in Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. In order to calculate the value of supply attributable to Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand, QR has to proceed as under—

I.QR will ascertain the viewership figures for their channel in the last week of September 2017 from the Broadcast Audience Research Council. Let us assume it is one lakh for Delhi and two lakhs for the region comprising of Uttar Pradesh and Uttarakhand and one lakh for the region comprising of Bihar and Jharkhand;

1. since the Broadcast Audience Research Council clubs Uttar Pradesh and Uttarakhand into one region and Bihar and Jharkhand into another region, QR will ascertain the population figures for Uttar Pradesh, Uttarakhand, Bihar and Jharkhand from the latest census;

III. by applying the ratio of the populations of Uttar Pradesh and Uttarakhand, as so ascertained, to the Broadcast Audience Research Council viewership figures for their channel for this region, the viewership figures for Uttar Pradesh and Uttarakhand and consequently the ratio of these viewership figures can be calculated.

Let us assume that the ratio of the populations of Uttar Pradesh and Uttarakhand works out to 9: 1. When this ratio is applied to the viewership figures of two lakhs for this region, the viewership figures for Uttar Pradesh and Uttarakhand work out to one lakh eighty thousand and twenty thousand respectively;

1. in a similar manner the breakup of the viewership figures for Bihar and Jharkhand can be calculated. Let us assume that the ratio of populations is 4:1 and when this is applied to the viewership figure of one lakh for this region, the viewership figure for Bihar and Jharkhand works out to eighty thousand and twenty thousand respectively;
2. the viewership figure for each State works out to Delhi (one lakh), Uttar Pradesh (one lakh eighty thousand), Uttarakhand (twenty thousand), Bihar (eighty thousand) and Jharkhand (twenty thousand). The ratio is thus 10:18:2: 8:2 or 5:9:1: 4:1(simplification).
3. this ratio has to be applied when indicating the breakup of the amount pertaining to each State. Thus if the total amount payable to QR by ABC is twenty lakh rupees, the State wise breakup is five lakh rupees (Delhi), nine lakh rupees (Uttar Pradesh) one lakh rupees (Uttarakhand), four lakh rupees (Bihar) and one lakh rupees (Jharkhand). Separate invoices will have to be issued State wise and Union territory wise by QR to ABC indicating the value pertaining to that State or Union territory.

Illustration 8: Advertisement at Cinema Halls

ABC commissions ST for an advertisement on ‘Pradhan Mantri Awas Yojana’ to be displayed in the cinema halls in Chennai and Hyderabad. The place of supply of this service is in the states of Tamil Nadu and Telangana. The amount actually paid to the cinema hall or screens in a multiplex, in Tamil Nadu and Telangana as the case may be, is the value of advertisement service in Tamil Nadu and Telangana respectively. Separate invoices will have to be issued State wise and Union territory wise by ST to ABC indicating the value pertaining to that State.

Illustration 9: Advertisement over Internet

ABC issues a release order to WX for a campaign over internet regarding linking Aadhaar with one’s bank account and mobile number. WX runs this campaign over certain websites. In order to ascertain the state-wise breakup of the value of this service which is to be reflected in the invoice issued by WX to ABC, WX has to first refer to the Telecom Regulatory Authority of India figures for quarter ending March, 2017, as indicated on their website www.trai.gov.in. These figures show the service area wise internet subscribers. There are twenty-two service areas. Some relate to individual States some to two or more States and some to part of one State and another complete State. Some of these areas are metropolitan areas.

In order to calculate the State wise breakup, first the State wise breakup of the number of internet subscribers is arrived at. (In case figures of internet subscribers of one or more States are clubbed, the subscribers in each State are to be arrived at by applying the ratio of the respective populations of these States as per the latest census.). Once the actual number of subscribers for each State has been determined, the second step for WX involves calculating the State wise ratio of internet subscribers.

Let us assume that this works out to 8: 1: 2… and so on for Andhra Pradesh, Arunachal Pradesh, Assam…. and so on. The third step for WX will be to apply these ratios to the total amount payable to WX so as to arrive at the value attributable to each State. Separate invoices will have to be issued State wise and Union territory wise by WX to ABC indicating the value pertaining to that State or Union territory.

Illustration 10: Advertisement through short messaging service

Case A: In the case of the telecom circle of Assam, the amount attributed to the telecom circle of Assam is the value of advertisement service in Assam.

Case B: The telecom circle of North East covers the States of Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Manipur and Tripura. The ratio of populations of each of these States in the latest census will have to be determined and this ratio applied to the total number of subscribers for this telecom circle so as to arrive at the State wise figures of telecom subscribers. Separate invoices will have to be issued State wise by the service provider to ABC indicating the value pertaining to that State.

Case C: ABC commissions UV to send short messaging service to voters asking them to exercise their franchise in elections to be held in Maharashtra and Goa. The place of supply of this service is in Maharashtra and Goa. The telecom circle of Maharashtra consists of the area of the State of Maharashtra (excluding the areas covered by Mumbai which forms another circle) and the State of Goa. When calculating the number of subscribers pertaining to Maharashtra and Goa, UV has to –

1. obtain the subscriber figures for Maharashtra circle and Mumbai circle and add them to obtain a combined figure of subscribers;
2. obtain the figures of the population of Maharashtra and Goa from the latest census and derive the ratio of these two populations;

III. this ratio will then have to be applied to the combined figure of subscribers so as to arrive at the separate figures of subscribers pertaining to Maharashtra and Goa;

1. the ratio of these subscribers when applied to the amount payable for the short messaging service in Maharashtra circle and Mumbai circle, will give breakup of the amount pertaining to Maharashtra and Goa.

Separate invoices will have to be issued State wise by UV to ABC indicating the value pertaining to that State.

Case D: The telecom circle of Andhra Pradesh consists of the areas of the States of Andhra Pradesh, Telangana and Yanam, an area of the Union territory of Puducherry. The subscribers attributable to Telangana and Yanam will have to be excluded when calculating the subscribers pertaining to Andhra Pradesh.

 

RELEVANT NOTIFICATIONS

Date of Issue	Notification No.	Matter
28th June, 2017	3/2017-Integrated Tax	Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017
15th November, 2017	12/2017-Integrated Tax	Apportionment of IGST with respect to advertisement services under section 12 (14) of the IGST Act, 2017.
31st December, 2017	04 /2018-Integrated Tax	Seeks to amend the IGST Rules, 2017 so as to notify the rules for determination of place of supply in case of inter-State supply under sections 10(2), 12(3), 12(7), 12(11) and 13(7) of the IGST Act, 2017.
29th January, 2019	01/2019- Integrated Tax	Seeks to bring into force the IGST (Amendment) Act, 2018
31st July, 2023	28/2023-Central Tax	Seeks to notify the provisions of sections 137 to 162 of the Finance Act, 2023 (8 of 2023).

 

Relevant Circular

Date of Issue	Circular No.	Matter
27th September, 2017	2/1/2017-IGST	Clarification on supply of satellite launch services by ANTRIX Corporation Ltd.
14th July, 2018	48/22/2018-GST	Circulars clarifying miscellaneous issues related to SEZ and refund of unutilized ITC for job workers.
28th June, 2019	103/22/2019-GST	Clarification regarding determination of place of supply in certain cases-reg.
27th December, 2022	184/16/2022-GST	Clarification on the entitlement of input tax credit where the place of supply is determined in terms of the proviso to sub-section (8) of section 12 of the Integrated Goods and Services Tax Act, 2017
27th, October, 2023	203/15/2023-GST	Clarification regarding determination of place of supply in various cases
31st December, 2024	242/36/2024-GST	Clarification on place of supply of Online Services supplied by the suppliers of services to unregistered recipients

 

 

SECTION-13 Place of supply of services where location of supplier or location of recipient is outside India

SECTION AND RELEVANT RULES

Section 13. Place of supply of services where location of supplier or location of recipient is outside India.-

(1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.

(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:

Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

(3) The place of supply of the following services shall be the location where the services are actually performed, namely:—

• • services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:

Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:

[Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;]^[1]

• • services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services.

(4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located.

(5) The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.

(6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory, its place of supply shall be the location in the taxable territory.

(7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed

(8) The place of supply of the following services shall be the location of the supplier of services, namely:–

• • services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;
  • intermediary services;
  • services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.

Explanation.– For the purposes of this sub-section, the expression,–

(a) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account;

(b) “banking company” shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934;

(c) “financial institution” shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934;

(d) “non-banking financial company” means,–

• • a financial institution which is a company;
  • a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or
  • such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.

(9) [***]^[2]

(10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.

(11) The place of supply of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.

(12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services.

Explanation.–For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied, namely:–

• • the location of address presented by the recipient of services through internet is in the taxable territory;
  • the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;
  • the billing address of the recipient of services is in the taxable territory;
  • the internet protocol address of the device used by the recipient of services is in the taxable territory;
  • the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;
  • the country code of the subscriber identity module card used by the recipient of services is of taxable territory;
  • the location of the fixed land line through which the service is received by the recipient is in the taxable territory.

(13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.

 

Reference for Amendments:-

[1] Substituted for “Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs;” by The Integrated Goods and Services Tax (Amendment) Act, 2018 (No. 32 of 2018) – Brought into force w.e.f. 01.02.2019.
[2] Omitted sub-section (9) vide The Finance Act, 2023 (No.8 of  2023) dated 31.03.2023. Prior to its omission it reads as “(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.” Brought into force w.e.f. 01.10.2023, vide Notification No. 28/2023-Central Tax dated 31.07.2023.

 

ANALYTICAL REVIEW

Place of supply of services where location of supplier or location of recipient is outside India.

Section 13 provides for determination of place of supply of services in cases where either the location of the supplier of services or the recipient of services is outside India. Thus, this section provides the place of supply in relation to international or cross-border supply of services.

A gist of various provisions covered under this section have been provided below:

Section	Situation
13(2)	General Provision
13(3)	Place of Supply in relation to Performance based Services.
13(4)	Place of Supply in relation to Immovable Property.
13(5)	Place of Supply in relation to admission to a cultural, artistic, sporting, scientific, educational event.
13(6)	Place of Supply in where services specified in sub-section (3), (4) & (5) are supplied at more than one location.
13(7)	Place of Supply in where services specified in sub-section (3), (4) & (5) are supplied in more than one State or UT.
13(8)	Place of Supply of the following: Services by banking company, Financial Institution or NBFC. Intermediary services services of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.
13(9)	Omitted vide The Finance Act, 2023 (No.3 of 2023) dated 31.03.2023.w.e.f. 01.10.2023 (Prior to 01.10.2023, it provides Place  of Supply in relation to transportation of goods)
13(10)	Place of Supply in relation to passenger transportation services.
13(11)	Place of Supply in relation to services provided on board a conveyance.
13(12)	Place of Supply of Online Information and database access or retrieval services.
13(13)	Power to CG to determine Place of Supply to avoid double taxation.

• Sec 13(2): General Provision

• Sec 13(3): Performance Based Services read with Rule 13(6) and 13(7)

Nature of Supply	Place of Supply
Services requiring physical presence of goods on which              the services are to be performed (Section 13(3)(a))	Location where the service is actually performed
Services supplied in respect of goods, that are provided from a remote location by electronic means (Proviso to Section 13(3)(a))	Location where goods are situated at the time of supply of services
Exception to Section 13(3)(a): second proviso to Section 13(3)(a):  nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process. Substituted by the Integrated Goods and Services Tax (Amendment) Act, 2018, w.e.f. 1-2-2019.
Services supplied to an individual which requires the physical presence of the recipient (Section 13(3)(b))	Location where the service is actually performed
Where the above-mentioned services are provided at more than one location including a location in the taxable territory (Section 13(6))	Location in the Taxable Territory
Where the above-mentioned services are provided in more than one state or UT (Section 13(7)	Each of such state or UT.

Circular No. 103/22/2019-GST dated 28^th June’2019:

Nature of Supply	Place of Supply
Supply of various services on unpolished diamonds such as cutting and polishing activity which have been temporarily imported into India and are not put to any use in India.	The place of supply would be determined as per the provisions contained in sub-section (2) of Section 13 of the IGST Act in accordance with the exception given in second proviso to Section 13(3).
Illustration: Cut Diamonds. Ltd. imports raw diamonds from a diamond merchant in Singapore for the purpose of cutting, polishing and finishing the same. After the work is completed, the finished diamonds are exported to the diamond merchant in Singapore. The place of supply of the services undertaken by Cut Diamonds Ltd. is the location of the recipient, i.e., Singapore.

Illustration:

1. Golden Ltd. (Gurugram, Haryana) imports a computer server from Chicago for being installed in its factory at Gurugram, Haryana. To install such computer server, Golden Ltd. takes the service of an engineer who comes to India from Chicago for this specific installation. The place of supply of installation service, which requires the physical presence of machinery/computer server, is the location where the service is actually performed, i.e., Gurugram, Haryana.
2. A mobile company located in London (UK) takes services of a software company located in New Delhi for installation of a software in its mobiles in UK. The Indian software company provides its services through electronic means from its office in India. The place of supply is the location where goods (mobile phones) are situated at the time of supply of service, i.e., UK.
3. Arpita, a make-up artist registered in Haryana, travels to Bali, Indonesia to provide her services to Ms. Julie, a resident of Bali, Indonesia. The place of supply is the location where the services are actually performed, i.e., Bali, Indonesia.

 Value of supply of service supplied in more than one State/Union territory (Notification No. 4/2018-Integrated Tax dated 31^st December’2018):

Where supply of service is provided in different states or union territories with respect to goods which are required to be made physically available by the recipient of services or in the case of services supplied to an individual, the value of supply should be is in proportion to the value for services determined in terms of the contract or agreement entered into in this regard.

However, in the absence of any such contract or agreement between the supplier and the recipient, the value of supply will be determined as per the provisions given in Rule 7 of Notification no. 4/2018-IGST.

As per the said notification, the value of supply will be determined in the following manner:

Scenarios	Value of Supply
A. Services supplied on same goods	equally dividing the value of the service in each of the  States and Union territories where the service is performed
Illustration: A company C which is located in Kolkata is providing the services of testing of a dredging machine and the testing service on the machine is carried out in Orissa and Andhra Pradesh. The place of supply is in Orissa and Andhra Pradesh and the value of the service in Orissa and Andhra Pradesh will be ascertained by dividing the value of the service equally between these two States
B. Services supplied on different goods	taking the ratio of the invoice value of goods in each of the States and Union territories, on which service is performed, as the ratio of the value of the service performed in each State or Union territory.
Illustration: A company C which is located in Delhi is providing the service of servicing of two cars belonging to Mr. X. One car is of manufacturer J and is located in Delhi and is serviced by its Delhi workshop. The other car is of manufacturer A and is located in Gurugram and is serviced by its Gurugram workshop. The value of service attributable to the Union Territory of Delhi and the State of Haryana respectively shall be calculated by applying the ratio of the invoice value of car J and the invoice value of car A, to the total value of the service.
C. Services supplied to individuals	applying the generally accepted accounting principles
Illustration: A makeup artist M has to provide make up services to an actor A. A is shooting some scenes in Mumbai and some scenes in Goa. M provides the makeup services in Mumbai and Goa. The services are provided in Maharashtra and Goa and the value of the service in Maharashtra and Goa will be ascertained by applying the generally accepted accounting principles.

Place of supply in case of software/ design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry:

Circular No. 118/37/2019 GST dated 11.10.2019 clarified that the place of supply of software/design by supplier located in taxable territory to service recipient located in non-taxable territory by using sample prototype hardware / test kits in a composite supply, where such testing is an ancillary supply, is the location of the service recipient as per section 13(2).   Provisions of section 13(3)(a) do not apply separately for determining the place of supply for ancillary supply in such cases.

•  Sec 13(4): Supply of service in relation to Immovable property read with Section 13(6) and 13(7)

Illustration:

1. Anuj, an Interior Decorator (New Delhi), provides professional services to Mr. Dheeraj of Ontario, Canada in relation to his immovable property located in Chandigarh. The place of supply is the location of immovable property, i.e., Chandigarh.
2. Anuj, an Interior Decorator (New Delhi), enters into a contract with Mr. Dheeraj of Ontario, Canada to provide professional services in respect of immovable properties of Mr. Dheeraj located in Chandigarh and Ontario, Canada. Since the immovable properties are located in more than one location including a location in the taxable territory, the place of supply is the location in the taxable territory, i.e., Chandigarh.

Value of supply of service supplied in more than one State/Union territory (Notification No. 4/2018-Integrated Tax dated 31^st December’2018):

Where supply of service is provided in different states or union territories with respect to supply of services directly in relation to immovable property, the value of supply should be in proportion to the value for services determined in terms of the contract or agreement entered into in this regard.

However, in the absence of any such contract or agreement between the supplier and the recipient, the value of supply will be determined as per the provisions given in Rule 8 of Notification no. 4/2018-IGST.

Rule 8 states that in the absence of any such contract or agreement, the value is determined by applying the provisions of rule 4 of the said rules, mutatis mutandis.

Thus, the provisions for determining the proportionate value of services provided directly in relation to an immovable property under section 12(3) are applicable for determining the proportionate value of services directly provided in relation to an immovable property under section 13(4) [either the supplier or the recipient is located outside India] as well.

Rule 4 has been reproduced below for ready reference:

SR. NO.	TYPE OF SERVICE IN RELATION TO IMMOVABLE PROPERTY	FACTOR WHICH DETERMINES THE PROPORTIONATE VALUE OF SERVICE
(a)	Service provided by way of lodging accommodation by hotel, inn, guest house etc. (other than the cases where such property is a single property located in 2 or more contiguous States/ UT or both) Services ancillary to services specified above	Number of nights stayed in such property
(b)	All other services provided in relation to immovable property including services by way of accommodation in any immovable property for organising any marriage or reception etc. Supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called where such property is a single property located in 2 or more contiguous States or/and UT services ancillary to services mentioned above	Area of the immovable property lying in each State/ UT
(c)	Services by way of lodging accommodation by a house boat or vessel and its ancillary services	Time spent by the boat or vessel in each such State/ UT, to be determined on the basis of declaration made by the service provider.

• Sec 13(5): Place of supply in relation to services or organisation of events etc. read with Section 13(6) and Section 13(7):

Illustration:

1. A theatre group from South Africa organizes a play in Kingdom of Dreams, Gurugram, Haryana. The place of supply is the location where the event is actually held i.e., Gurugram, Haryana.
2. An event management company registered in Uttar Pradesh organises an art exhibition displaying works of an international painter based in Malaysia. The exhibition is organised in 3 countries including Bangalore in India. Since the service is supplied at more than one location including a location in the taxable territory, the place of supply is the location in the taxable territory, i.e., Bangalore.

Value of supply of service supplied in more than one State/Union territory (Notification No. 4/2018-Integrated Tax dated 31^st December’2018):

Where supply of service is provided in different states or union territories with respect to supply of services by way of admission to, or organization of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organization, the value of supply should be in proportion to the value for services determined in terms of the contract or agreement entered into in this regard.

However, in the absence of any such contract or agreement between the supplier and the recipient, the value of supply will be determined as per the provisions given in Rule 9 of Notification no. 4/2018-IGST.

Rule 9 states that in the absence of any such contract or agreement, the value is determined by applying the provisions of rule 5 of the said rules, mutatis mutandis.

Thus, the provisions for determining the proportionate value of services supplied by way of organization of an event under section 12(7) are applicable for determining the proportionate value of services supplied by way of admission to or organization of an event under section 13(5) [either the supplier or the recipient is located outside India] as well.

Rule 5 has been reproduced below for ready reference:

Nature of Supply	Place of Supply
Where the above-mentioned services are supplied to an unregistered person, and the event is held in more than one state or UT in India, and a single amount is being charged for such supply of services:	The place of supply in the absence of any contract or agreement between the parties, will be determined on the basis of generally accepted accounting principles.

• Sec 13(8): Place of supply in case of banking & Financial Services, Intermediary services and services relating to hiring of means of Transport:

 

Relevant Circulars

Circular No. 220/14/2024-GST:  Place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors

Custodial Services Definition and Scope: Include safekeeping of securities of clients and incidental services.

Account Holder Clarification: Custodial services are not considered services provided to account holders as per Section 13(8)(a) of the IGST Act.

The place of supply for services supplied by a banking company or financial institution to account holders is the location of the supplier.

Place of Supply Determination: Custodial services are not covered under Section 13(8)(a) of the IGST Act as they do not qualify as services provided to ‘account holders’.

Place of supply for custodial services is determined under the default provision, Section 13(2), implying the location of the recipient of services.

Illustrations:

1. Mr. Dinesh, a non-resident, has an NRE account with Allahabad Bank (registered in New Delhi) in India. The place of supply of banking services provided by the Allahabad Bank to Mr. Dinesh, a non-resident customer, is the location of the supplier of service, i.e., New Delhi.
2. Sakshi, an unregistered person based in Dehradun, Uttarakhand hires a yacht from a company based in Malaysia for 10 days. The place of supply is the location of the supplier of services, i.e., Malaysia.
3. Mr. David, a foreign tourist, on a visit to Agra (UP) uses his international debit card to withdraw money from an ATM of a local Bank registered in UP. Mr. David has a non-resident ordinary account in the local bank from where the money was withdrawn. The place of supply is the location of the supplier of services i.e., UP.

Case Laws 

1. A Person Who Supplies the Goods and Services On His Own Account Cannot Be Considered As Intermediary – Delhi High Court

M/s Ernst and Young Limited Vs. Additional Commissioner, CGST Appeals -II, Delhi and Anr. in W.P. (C) – 8600/2022 dated 23.03.2023

The Hon’ble High Court of Delhi held that the assessee has provided the services on his own account and issued invoices directly to the service receivers.  The assessee is not ‘arranging and facilitating’ the supply of goods and services rather it is providing the services on its own account to the service receivers and thus, cannot be considered as an intermediary under Section 2(13) of the IGST Act.

 

To read the complete judgment Click here 

Section 13(9) – Place of supply in case of Transportation Services of goods other than by way of mail or Courier (Omitted)

The has also been omitted vide Finance Act, 2023 from 1-10-2023. Thus, place of supply will be as per residuary provision i.e. section 13(2) of IGST Act when either supplier of service or recipient of service is located outside India.

Prior to its omission, Place of Supply of services of transportation of goods, other than by way of mail or courier, where location of supplier or location of recipient is outside India was destination of such goods. In such cases, if goods are destined for a place out of India, its place of supply will be out of India.

Section 13(10) –  Place of supply in respect of passenger transportation services 

The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.

Section 13(11) – Place of supply of services provided on board a conveyance 

The place of supply of services provided on board a conveyance during the course of a passenger transport operation… shall be the first scheduled point of departure of that conveyance for the journey.

Illustrations:

Daniel, a foreign tourist, has booked a ticket for Mumbai-Sri Lanka flight from an airline registered in Mumbai for a continuous journey without any stopover. The place of supply of services by airlines is the place where the passenger embarks on the conveyance for a continuous journey, i.e., Mumbai.

Place of supply of satellite launch services

Circular No. 2/1/2017 IGST dated 27.09.2017 has clarified that place of supply of satellite launch services supplied by ANTRIX Corporation Limited, a wholly owned Government of India Company, to international customers would be outside India in terms of section 13(9) and such supply which meets the requirements of section 2(6), will constitute export of service and shall be zero rated in accordance with section 16.

Where satellite launch service is provided to a person located in India, the place of supply of satellite launch service would be governed by section 12(8) and would be taxable under CGST Act, UTGST Act or IGST Act, as the case may be.

• Sec 13(12): Place of Supply of OIDAR Services:

Section 2(17) of the IGST Act’2017, defines OIDAR Services as:

“Online information and database access or retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as, —

(i) advertising on the internet;

(ii) providing cloud services;

(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;

(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;

(v) online supplies of digital content (movies, television shows, music and the like);

(vi) digital data storage; and

(vii) online gaming;”

Explanation to Section 13(12):

Person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied, namely: —

1. the location of address presented by the recipient of services through internet is in the taxable territory;
2. the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;
3. the billing address of the recipient of services is in the taxable territory;
4. the internet protocol address of the device used by the recipient of services is in the taxable territory;
5. the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;
6. the country code of the subscriber identity module card used by the recipient of services is of taxable territory;
7. the location of the fixed land line through which the service is received by the recipient is in the taxable territory.

• Sec 13(13): Notified Services

In order to prevent double taxation or non-taxation of supply of any service, section 13(13) empowers the Government to notify any service for which the place of supply shall be the place of effective use and enjoyment of service.

Certain Services have been notified by the Government through Notification No. 2/2020- Integrated Tax dated 26^th March’2020 and Notification No. 4/2019- Integrated Tax dated 30^th September’2019.

Sr. No.	Nature of Supply	Place of Supply
1.	Supply of maintenance, repair or overhaul service in respect of aircrafts, aircraft engines and other aircraft components or parts supplied to a person for use in the course or furtherance of business.	Location of Recipient of Service (Notification no. 2/2020)
2.	Integrated discovery and development	Location of Recipient of Service subject to the following conditions: 1. Supply of services from the taxable territory are provided as per a contract between the service provider located in taxable territory and service recipient located in non-taxable territory. 2. Such supply of services fulfils all other conditions in the definition of export of services, except sub- clause (iii) provided at clause (6) of Section 2 of Integrated Goods and Services Tax Act, 2017 (13 of 2017). (Notification No. 4/2019)
3.	Integrated development
4.	Evaluation of the efficacy of new chemical/ biological entities in animal models of disease
5.	Evaluation of biological activity of novel chemical/ biological entities in in-vitro assays
6.	Drug metabolism and pharmacokinetics of new chemical entities
7.	Safety Assessment/ Toxicology
8.	Stability Studies
9.	Bio-equivalence and Bioavailability Studies
10.	Clinical trials
11.	Bio analytical studies

 

RELEVANT NOTIFICATIONS

Date of Issue	Notification No.	Matter
28th June, 2017	3/2017-Integrated Tax	Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017
31st December, 2017	04 /2018-Integrated Tax	Seeks to amend the IGST Rules, 2017 so as to notify the rules for determination of place of supply in case of inter-State supply under sections 10(2), 12(3), 12(7), 12(11) and 13(7) of the IGST Act, 2017.
29th January, 2019	01/2019- Integrated Tax	Seeks to bring into force the IGST (Amendment) Act, 2018
30th September, 2019	04/2019- Integrated Tax	Seeks to notify the place of supply of R&D services related to pharmaceutical sector as per Section 13(13) of IGST Act, as recommended by GST Council in its 37th meeting held on 20.09.2019.
26th March, 2020	02/2020-Integrated Tax	Seeks to amend Notification No. 4/2019-Integrated Tax dt. 30.09.2019 to change the place of supply for B2B MRO services to the location of the recipient.
02nd June, 2021	03/2021- Integrated Tax	Seeks to amend Notification No. 4/2019-Integrated Tax dt. 30.09.2019 to change the place of supply for B2B MRO services in case of Shipping industry, to the location of the recipient.
31st July, 2023	28/2023-Central Tax	Seeks to notify the provisions of sections 137 to 162 of the Finance Act, 2023 (8 of 2023).

 

Relevant Circular

Date of Issue	Circular No.	Matter
27th September, 2017	2/1/2017-IGST	Clarification on supply of satellite launch services by ANTRIX Corporation Ltd.
31st December, 2018	78/52/2018-GST	Clarification on export of services under GST
28th June, 2019	103/22/2019-GST	Clarification regarding determination of place of supply in certain cases-reg.
11th October,2019	118/37/2019-GST	Clarification regarding determination of place of supply in case of software/design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry.
20th September, 2021	159/15/2021-GST	Clarification on doubts related to scope of “Intermediary”
27th October, 2023	203/15/2023-GST	Clarification regarding determination of place of supply in various cases
26th June, 2024	220/14/2024-GST	Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors
10th September, 2024	230/24/2024-GST	Clarification in respect of advertising services provided to foreign clients
10th September, 2024	232/26/2024-GST	Clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside Indi

 

 

SECTION-14 Special provision for payment of tax by a supplier of online information and database access or retrieval services.-

SECTION AND RELEVANT RULES

Section 14. Special provision for payment of tax by a supplier of online information and database access or retrieval services.-

(1) On supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services:

Provided that in the case of supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient, an intermediary located in the non-taxable territory, who arranges or facilitates the supply of such services, shall be deemed to be the recipient of such services from the supplier of services in non-taxable territory and supplying such services to the non-taxable online recipient except when such intermediary satisfies the following conditions, namely:–

• • the invoice or customer‘s bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in non-taxable territory;
  • the intermediary involved in the supply does not authorise the charge to the customer or take part in its charge which is that the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the non-taxable online recipient and the supplier of such services;
  • the intermediary involved in the supply does not authorise delivery; and
  • the general terms and conditions of the supply are not set by the intermediary involved in the supply but by the supplier of services.

(2) The supplier of online information and database access or retrieval services referred to in sub-section (1) shall, for payment of integrated tax, take a single registration under the Simplified Registration Scheme to be notified by the Government:

Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay integrated tax on behalf of the supplier:

Provided further that if such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.

 

ANALYTICAL REVIEW

Special provision for payment of tax by a supplier of online information and database access or retrieval services.

“online information and database accessor retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology and includes electronic services such as,

(a)   advertising on the internet;

(b)   providing cloud services;

(c)   provision of e-books, movie, music, software and other intangibles via telecommunication networks or internet;

(d)   providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network;

(e)   online supplies of digital content (movies, television shows, music, etc.); digital data storage; and

(f)   online gaming.

Special Provision for payment of tax by a supplier of online information and database accessor retrieval services

If any person in non-taxable territory provides OIDAR service and the recipient of such service is a non-taxable online recipient, then the supplier of service who is in non-taxable territory shall be the person liable for paying integrated tax on such supply of services.

In the case of supply of OIDAR services by any person located in a non-taxable territory and received by a non-taxable online recipient, an intermediary located in the non-taxable territory, who has arranged the supply of such services, shall be deemed to be the recipient of such services from the supplier of services in non-taxable territory and supplying such services to the non-taxable online recipient, except when such intermediary satisfies the following conditions:

(a) receipt issued or made available by such intermediary;

(b) the intermediary involved in the supply does not authorize the charge to the customer or take part in its charge, which is that the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the non-taxable online recipient and the supplier of such services;

(c) the intermediary involved in the supply does not authorize delivery;

(d) the general terms and conditions of the supply are not set by the intermediary involved in the supply but by the supplier of services.

The supplier of online information and database accessor retrieval service has to take a single registration under the Simplified Registration Scheme to be notified by the government.

If there is any person located in the taxable territory and is representing such supplier for any purpose in the taxable territory will have to get registered and pay integrated tax on behalf of the supplier. If such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.

 

RELEVANT NOTIFICATIONS

Date of Issue	Notification No.	Matter
19th June, 2017	1/2017-Integrated Tax	Seeks to bring certain sections of the IGST Act, 2017 into force w.e.f. 22.06.2017
19th June, 2017	2/2017-Integrated Tax	Seeks to empower the Principal Commissioner of Central Tax, Bengaluru West to grant registration in case of online information and database access or retrieval services provided or agreed to be provided by a person located in non-taxable territory and received by a non-taxable online recipient.
29th September, 2023	04/2023- Integrated Tax	Seeks to provide Simplified registration Scheme for overseas supplier of online money gaming

 

 

SECTION-14A Special provision for specified actionable claims supplied by a person located outside taxable territory

SECTION AND RELEVANT RULE

[Section 14A. Special provision for specified actionable claims supplied by a person located outside taxable territory.-

(1) A supplier of online money gaming as defined in clause (80B) of section 2 of the Central Goods and Services Tax Act, 2017, not located in the taxable territory, shall in respect of the supply of online money gaming by him to a person in the taxable territory, be liable to pay integrated tax on such supply.

(2) For the purposes of complying with provisions of sub-section (1), the supplier of online money gaming shall obtain a single registration under the Simplified Registration Scheme referred to in sub-section (2) of section 14 of this Act:

Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay the integrated tax on behalf of the supplier:

Provided further that if such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he shall appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.

(3) In case of failure to comply with provisions of sub-section (1) or sub-section (2) by the supplier of the online money gaming or a person appointed by such supplier or both, notwithstanding anything contained in section 69A of the Information Technology Act, 2000, any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier shall be liable to be blocked for access by the public in such manner as specified in the said Act.]^[1]

Reference for Amendments:-

[1] Inserted by The Integrated Goods and Services Tax (Amendment) Act, 2023 (No. 30 of 2023) dated 18.08.2023. Brought into force w.e.f. 01.10.2023.

 

ANALYTICAL REVIEW

This New Section 14A has been inserted vide The Integrated Goods and Services Tax (Amendment) Act, 2023 (No. 30 of 2023) dated 18.08.2023. Brought into force w.e.f. 01.10.2023, to provide for special provision for online money gaming supplied by a person located outside the taxable territory to a person located in India.

The term “online money gaming” is defined in Section 2(80B) of the CGST Act, 2017 as inserted vide The Central Goods and Services Tax (Amendment) Act, 2023 (No. 30 of 2023) dated 18.08.2023, brought into force w.e.f. 01.10.2023, to mean that

“online gaming in which players pay or deposit money or money’s worth, including virtual digital assets, in the expectation of winning money or money’s worth, including virtual digital assets, in any event including game, scheme, competition or any other activity or process, whether or not its outcome or performance is based on skill, chance or both and whether the same is permissible or otherwise under any other law for the time being in force.”

This typically includes games where users stake money on outcomes (chance or skill), and the platform facilitates it digitally.

Special Provisions as inserted vide this Section is as under:

• If an online money gaming operator is outside India but provides services to users within India, they are liable to pay Integrated Tax (IGST) on such supplies. Meaning hereby, liability is not shifted to the Indian user via reverse charge; the foreign supplier is directly liable
• For purposes of paying tax, such overseas suppliers must register under the Simplified Registration Scheme (as per Section 14(2) of the IGST Act. In others words, such person mandatorily required to take Simplified Registration for payment of tax.
  • If the supplier has a representative in India, then the representative must register and pay IGST on behalf of the supplier.
  • If the supplier has no presence or representative in India, they must appoint one, who then becomes liable for the IGST
• Non-compliance with tax registration or payment requirements can result in the blocking of access to their online gaming platforms in India.

 

RELEVANT NOTIFICATION

Date of Issue	Notification No.	Matter
29th September, 2023	02/2023- Integrated Tax	Seeks to notify the provisions of the Integrated Goods and Services Tax (Amendment) Act, 2023
29th September, 2023	04/2023- Integrated Tax	Seeks to provide Simplified registration Scheme for overseas supplier of online money gaming