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Place of Supply of goods1.FUNDAMENTAL ISSUES

1.1.Dual nature of GST

GST is destination tax has two components one is Central Tax and other is State Tax. In the course of Intra-State Supply (Intra-UT Supply), CGST and SGST shall be payable, these two components shall be collected and segregate by taxpayers, collect GST on the other hand in the course of Inter-state transactions IGST (Integrated Goods and Services Tax) shall be payable, in this case the tax shall be collected by the Taxpayer and shall be segregated at the end of regulator, who shall transfer the State’s share to the State where the goods/services shall be consumed.

1.2. SIGNIFICANCE OF PLACE OF SUPPLY:

The dual GST framework is structured on the destination principle, hence the tax base shifts from production to consumption. Under this system if goods/service provided from one state to another, the recipient of goods or services will be liable to state tax (GST) to the State where the goods received/consumed, though supplier will remain liable to collect tax.

Place of supply rules in GST are important to determine the jurisdiction where a supply of goods and/or services is to be taxed. The determination of place of supply is very important to eliminate potential disputes regarding double taxation and double non-taxation of a supply.

2.STATUTORY PROVISIONS

Section 2(86) of CGST Act, 2017 and SGST Acts defined the term place of supply as under:

2.1 “Place of Supply”: Section 2(86): means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act.

Thus what shall be the place of supply shall be determined under Chapter V of IGST Act, 2017.

2.2 Chapter V of IGST Act, 2017 contains the following sections:

Section 10: Place of supply of goods other than supply of goods imported into, or exported from India; 2.3

Section 11: Place of supply of goods imported into, or exported from India; 2.4

Section 12: Place of supply of services where location of supplier and recipient is in India; 2.5

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

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Place of Supply under IGST Act, 2017

Written by: Mr. Mr. Sahay Vineet – CS, Senior Manager Taxation

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