HEC Group of Institutions , HARIDWAR

Online notes for the Subject – GST B.Com 5th

PLACE OF SUPPLY

GST has been formulated on the principle of destination based tax. The revenue of GST across to the place where the supplies that is of

goods or services or both are consumed.

Destination based tax session is a system where in revenue from tax relating to goods or services across to the jurisdiction where

they are being ultimately consumed.

So in GST it is of utmost importance to determine that what is the place of supply.

NEED FOR DETERMINING PLACE OF SUPPLY

1. To determine the place to which revenue accrue: place of supply provision determine the place i.e., taxable jurisdiction

where the tax should reach. the place of supply determine whether a transaction is intrastate or interstate.

2. Determine which taxes to be levied : in other words the place of supply of goods or services is required to determine

whether a supply is subject to a SGST + CGST in each state or Union Territory or else should attract I GST if it is an

interstate supply.

THE CENTRAL GOVERNMENT HAS NOTIFIED SEPARATE ACTS FOR LEVY OF CENTRAL GOODS AND

SERVICE TAX AND INTEGRATED GOODS AND SERVICE TAX. WHICH STATE GOVERNMENT WILL

NOTIFY THE LAW FOR LEVY OF STATE GOODS AND SERVICE TAX ON SUPPLY OF GOODS AND

SERVICES. IF THE SUPPLIER OF GOODS OR SERVICES AND PLACE OF SUPPLY OF GOODS OR SERVICES

ARE LOCATED IN THE SAME STATE THEN CGST AND SGST IS PAYABLE. HOWEVER IF THE SUPPLIER

AND PLACE OF SUPPLY LOCATED IN DIFFERENT STATES THEN I GST IS PAYABLE.

IMPORTANCE OF PLACE OF SUPPLY

Place of supply is the base which determines which tax will be levied( CGST, SGST, UTGST
OR IGST) because GST is destination based tax. GST is payable where goods or services are
consumed. so in order to determine the destination of consumption of goods or services
place of supply has to be determined.

RULES REGARDING DETERMINING THE PLACE OF SUPPLY

1. PLACE OF SUPPLY OF GOODS: the place of supply of goods determine as to which place
shall be considered as place of supply for chargeability of taxes under GST.
A) When supply of goods is within India :
 1. Where the goods are required to be removed from one place to another the
place of supply shall be the place where the movement of goods terminates.
Movement may have been done by the supplier or recipient or any third
person.
2. If goods are delivered on the direction of the third person then the principal
place of business of third person is is deemed to be the place of supply.
3. Where supply does not involve movement of goods , weather by the
supplier or the recipient the place of supply shall be the location of such
goods at the time of delivery to the recipient.
4. when the goods are assembled or are installed at sites the place of supply of
such goods shall be the place of installation or assembly. does the place of
installation of goods will be the place of supply of goods irrespective of the
location of buyer and seller.
5. Where the goods are supplied on board a conveyance i.e., on a train or
aircraft or vessel to the passenger, the goods are loaded in the train from a
particular station where as the actual consumption of the goods may take
place at subsequent station. At this time the place of supply of goods will be
the place where the goods are loaded.
6. As per section 10(2) if the place of supply cannot be determined, it shall be
determined in manner prescribed by the central government on
recommendation of GST council.
B) PLACE OF SUPPLY FOR IMPORT AND EXPORT OF GOODS : section 11 of the I
GST act provides for determination of place of supply of goods imported into or
exported from India. Subsection 1 provides that the place of supply of imported
goods shall be the location of the importer. Subsection to provide that the place
of supply of exported goods shall be the location outside India.
2. PLACE OF SUPPLY OF SERVICES: to determine the place of supply of services the
following steps involved in determining the place of supply of services.
Before studying about the place of supply of services we have to know about who is
the recipient of service and what is the location of supplier of service.

Who is termed as recipient of service ?

The determination of recipient of services crucial from the aspect that first recipient of
service has to be determined and then only location of recipient should be determined.
Section 2(93) of CGST Act defines recipient of service means:
a) Where consideration is payable for the supply of goods or services
or both the person who is liable to pay that consideration
b) where no consideration is payable for the supply of goods the
person to whom goods are delivered or made available or to home
position or use of the goods is given or made available
c) Where no consideration is payable for the supply of service, the
person to whom the services rendered.

What is the location of supplier of service?

The term location of supplier of services a self-explanatory term
which means that the place from where services have been
supplied. However in normal case services might be supplied from
multiple places.
 According to section 2(50 )in location of supplier of services means:
a) Where a supply is made from a place of business for which
registration has been obtained the location of such place of
business.
b) Where a supply is made from a place other than the place of
business for which registration has been obtained, the location
of such fixer establishment
c) where a supply is made from more than one establishment
whether the place of business office establishment the location
of establishment most directly concerned with the provision of
the supply.
d) In absence of such places the location of the usual place of
residence of the supplier.

What is the location of recipient of service?

The location of recipient of service has been defined as:

a) Where a supply is received at a place of business for which registration has

been obtained, location of such place of business.
b) Where is supplies received at a place other than the place of business for
which registration has been obtained, the location of such fixed
establishment
c) Where a supply is received after place more than one establishment,
whether the place of business office establishment, location of the
establishment most directly concerned with the receipt of supply
d) In absence of such places, the location of the usual place of residence of
recipient.
A. When supply off services is within India : section 12 of the I GST Act,
2017 provides for determination of place of supply of services when
the location of supplier of service and the location of recipient of
service both are in India.
1. If supply is to registered person then the place of supply
of service shall be the location of such person except for
the services mentioned in subsection 32 14 of section 12.
Then the place of supply shall be the location of such
person who is taxable recipient of service.
2. If the supply is to unregistered person and the location or
address of recipient of service is not recorded then the
location of recipient is considered as place of supply.
3. If the supply of service is to an unregistered person and
the location and address of the recipient of service is not
recorded then the location of the supplier is considered as
the place of supply.
4. specific provisions relating to the place of supply of
services covered under section 12 (3) To 12(14) of I GST
act .
B) Place of supply for import and export of services (section 13 I GST act, 2017)

Where either the location of the supplier of services for the location of the recipient of services is
outside India then the place of supply shall be determined as location of the receiver of services.

Place of supply of services = location of the recipient of services.

But if the location of the recipient of services is not available then the location of the supplier is
considered as place of supply.

Special provisions:

1. When goods are required to be made physically available for supply of service then place
of supply is the location based services is actually performed.
2. If the above services are provided through electronic means from a remote location then
the location of the goods at the time of supply of service is considered as place of supply.
3. If the goods are imported into India for repair and exported after repair without being put
to any use then location where services actually performed is considered as place of
supply.
4. If individuals physical presence is required for supply of services then the location where
service is actually performed is considered as place of supply.
5. Services in relation to immovable properties = location of such immovable property or
location where is intended to be located is considered as place of supply.
6. Admission to cultural artistic event amusement park etc. = place where event is held or
where such park is located is considered as place of supply.
7. If the above services are supplied from more than one location including taxable territory
then the location of the taxable territory with the greatest population of services provided
is considered as place of supply.
8. If above services are provided from more than one state or union territories then each of
the state in proportion of the value of service provided is considered as place of supply.
9. If the services are supplied by banking companies financial institutions and intermediaries
services hiring of means of transport etc. Then location of supplier is considered as place
of supply.
10. If the transportation of goods other than mail or courier are provided then place of
destination of goods is considered as place of supply.
11. if there is a transportation of passengers then the place from where pessenger embarks
the conveyance is considered as place of supply.
12. If Services on board a conveyance are provided then first scheduled point of departure of
conveyance is considered as place of supply.
13. If Online information and database access or retrieval services are provided then the
location of recipient of service is considered as place of supply.

SPECIAL PROVISIONS FOR SUPPLY OF ONLINE INFORMATION DATA ACCESS OR RETRIEVAL

SERVICES
As per section 2( 17 )of IGST Act, online information and data database access or retrieval
services mean services where 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:
1. Advertising on the internet
2. Providing Cloud services
3. Provision of e-book, movie, music, software and other intangible through
telecommunication networks or internet.
4. Providing data or information retrieval or otherwise to any person in electronic
form through a computer network.
5. Online supplies of digital contents
6. Digital data storage
7. Online gaming

In all the above cases the location of recipient of service is considered as place of
supply.
If an intermediary who are range of facilities a supply of such services located in
the non taxable territory is in between above transaction then such intermediary
 shall be deemed to be the recipient of such services subject to the following
conditions :
● The services is supplied in non taxable territory is clearly identifiable in the
invoice a customer’s bill or a sift issued by the intermediary
● Greenlight collects of processes payment in any manner not is responsible
for the payment of supply of service
● Imagery does not authorise delivery
● Terms and conditions of the supply or not set of intermediary

Where the online information and database access and retrieval services are received
through an intermediary who is also situated in non taxable territory such intermediary shall be
deemed to be the supplier of such service and the set intermediary shall be liable to pay tax on
such service.