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Place of supply is very important in determining whether a particular supply would constitute an interstate supply or an intrastate supply.

 

General Principles:

Except for the specific cases mentioned in this article the place of supply will be determined as per the general principles outlined. Where industry specific principles as highlighted in this article are framed place of supply will be determined by those specific principles. The general principles are as follows:-

1. The place of supply of services made to a registered person shall be the location of such person.

2. the place of supply of services made to any person other than a registered person shall be the location of the recipient where the address on record exists and the location of the supplier of services in other cases.

Immovable Property:

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 shall be the location at which the immovable property is located or inteded to be located.

Place of supply for any ancillary services will also be the same as above.

Accommodation Services:

The place of supply of services by way of lodging accommodation by a hotel,Inn,guest house,homestay, club or campsite, by whatever name called and including a house boat or any other vessel or in any immovable property for organizing any marriage or reception or matters related therewith, official, social, cultural, religious or business function including services provided in relation to such function at such property shall be the location at which the immovable property or boat or vessel is located or intended to be located.

Place of supply for any ancillary services will also be the same as above.

Where the immovable property or boat or vessel is located in more than one State, the supply of service shall be treated as made in each of the States 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 reasonable basis as may be prescribed in this behalf.

Training and performance appraisal services:

The place of supply of services in relation to training and performance appraisal to a registered person, shall be the location of such person and a person other than a registered person, shall be the location where the services are actually performed.

Admission to events and amusement park services:

The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, or 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.

Organisation of event services:

The place of supply of services provided by way of organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar events or services ancillary to organization of these events or services or assigning of sponsorship of these events to a registered person, shall be the location of such person and a person other than a registered person, shall be the place where the event is actually held.

If the event is held outside India, the place of supply shall be the location of the recipient.

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

Transportation of goods:

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

Transportation of passengers:

The place of supply of passenger transportation service to a registered person, shall be the location of such person and a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey.

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 as per general principles above described.
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.

Services on board a conveyance:

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

Banking and financial services:

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

Insurance services:

The place of supply of insurance services shall to a registered person, be the location of such person and to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.

Advertisement services to government:

The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for identifiable States, shall be taken as located in each of such States and the value of such supplies specific to each State shall be in proportion to amount attributable to service provided by way of dissemination in the respective States 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 reasonable basis as may be prescribed in this behalf.

Telecommunication services:

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

a)     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.
b)     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 record of the supplier of services.
c)     In cases where mobile connection for telecommunication, internet service and direct to home television services are provided on prepayment through a voucher or any other means,

(i) Through selling agent or a re-seller or a distributor of SIM card or re-charge voucher, shall be address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply.
(ii) By any person to the final subscriber shall be the location where such pre-payment is received or such vouchers are sold.

d)     In other cases shall be the address of the recipient as per records of the supplier of the service and where address of the recipient as per records of the supplier of service is not available, the place of supply shall be location of the supplier of service.

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 record of the supplier of services shall be the place of supply of such service.

Where the leased circuit is installed in more than one State 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 States in proportion to the value of services so provided in each State as ascertained from the terms of the contract or agreement entered into in this regard or, in absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf.

Certain other specified services:

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.

(The author practices as a Chartered Accountant under the name and style of Rishabh Kumar Barmecha and Associates and is an expert in auditing, financial investigation, direct and indirect taxation. The author can be reached at rishabhkumarbarmecha@gmail.com or 91 9007909221 or Twitter @CARKBarmecha.)

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