How to determine Place of Supply of Services in GST in India IN CASE LOCATION OF SUPPLIER OR LOCATION OF RECIPIENT IS OUT OF INDIA


In this article, we will discuss how to determine place of supply of specified SERVICES with reference to Section 13 of IGST Act where location of one the service provider or services receiver is located out of India and another is located in India.

 

Description of Supply of SERVICE

Place of Supply

Case 1

(Also refer note below)

Services supplied in respect of such goods which are REQUIRED to be made PHYSICALLY available to supplier of service by its recipient of service

e.g. Service recipient want to get the testing of blood samples to know various results, he have to provide the blood samples to service provider

Location where the services are actually performed.

 

Examples:

1) Mr. Pushkant of Uttrakhand sends his blood samples to a laboratory in Australia, this supply will not be considered as Import of services, because Place of Supply is out of India and Location of supplier is also Out of India.

2) XYZ Pvt Ltd is facing problems from some machinery in factory. It sends machinery to a company in China to repair it. This transaction will not be considered as import of service, because Place of Supply is out of India and Location of supplier is also Out of India.

Please note: This clause is not applicable 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.

Case 2

(Also refer note below)

Services supplied in respect of such goods which are REQUIRED to be made PHYSICALLY available to supplier of service by its recipient of service , but, service provider provides services on such goods from a remote location through electronic means

Location where goods are actually situated at the time of performance of services

 

Examples:

If a company is facing problem in some machinery and it is getting services from a company in America through Internet like through Team viewer, Citrix online, etc.

In this case, Location of service provider is Out of India, but the place of supply is within India. So, it will be recognized as Import of Services.

If we reverse abovesaid example, i.e. company in India is providing services to an American company through internet, it will be considered as an export transaction.

Case 3

(Also refer note below)

Services supplied to an Individual where  presence of such individual in person is must at the place of supplier to provide services

Or

Where such Individual not be able to present himself, then atleast his representative must be present in person with the Supplier of Service to act on his behalf.

Location where the services are actually performed by supplier of service

Case 4

(Also refer note below)

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

Location where the immovable property is located or intended to be located

Example: If a company hires a hotel in London for business function. What will be place of supply? Whether import of service provisions will apply here?

Answer: In this case:

Location of Immovable property is out of taxable territory, so place of supply is out of India i.e. in London.

Now, definition of  Import of service is saying that where location of service provider is out of India, location of service recipient is in India and place of supply is in India,  then, it will be considered as Import of service. Hence, this transaction will not be considered as import of service. In this case, following situations are occurred:

Location of service provider is also out of taxable territory.

Location of service recipient is in India

Place of supply is out of India

First two parameters are satisfying import of service but the third one (place of supply) is not satisfying definition of import of service. So, in this transaction, no GST will be paid to any Government of India.

Case 5

(Also refer note below)

Service by way of Admission to  or organization of:

  1. Cultural
  2. Artistic
  3. Sporting
  4. Scientific
  5. Educational
  6. Entertainment event
  7. Celebration, conference, fair, exhibition or similar events
  8. Services ancillary thereto
Location where the event is actually held

If someone goes to Mauritius  to attend annual function and pay some amount to buy tickets of such function, then it will not be considered as an Import of service because:

– Location of service provider is out of India; and

-Place of Supply is also out of India

Specific Notes on Case 1 to Case 5 :

  • Where any of above said services are provided at more than one location, including a location in taxable territory, then place of supply shall be location in taxable territory.
  • Where any of above said services are provided in more than one state or UT, place of supply shall be each such state or UT and value of services to be taken as per terms of contract, and if no such contract exists, then as per the Valuation Rules.
Case 6

 

Services supplied by a:

>  Banking company

>  Financial Institution

>  NBFC

to its account holders

Location of supplier of service

Explanations:

(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,––

(i)  a financial institution which is a company;

(ii) 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

(iii) 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.

 

Case 7

 

Services supplied as Intermediary

Location of supplier of service

Case 8 Services provided in respect of hiring of means of transport  upto a period of one month

(Means of transport includes Yachts but does not include aircrafts and vessels)

Location of supplier of service

Case 9 Service provided in relation to transportation of goods (Other than by way of Courier or mail)

Place of destination of such goods

Case 10 Services provided in relation to Passenger transportation services

Place of supply will be the place from where the passenger embarks on the conveyance for continuous journey

Case 11 Services provided on board  a conveyance during the course of a passenger transport  operation

Including those services intended to be wholly or substantially consumed while on board

First scheduled point of departure of that conveyance

Case 12 Provision of Online information and database access or retrieval services (OIDAR)

Location of recipient of services

Notes on OIDAR Services :

Person receiving OIDAR services shall be deemed to be located in taxable territory of India, if, any of two non-contradictory conditions are satisfied (i.e. to satisfy any of two conditions for which there is no contradiction)

 (a)    Location of address of recipient provided by him through internet is in the taxable territory;

(b)   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;

(c)    the billing address of the recipient of services is in the taxable territory;

(d)   the internet protocol address of the device used by the recipient of services is in the taxable territory;

(e)   the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;

(f)     the country code of the subscriber identity module card used by the recipient of services is of taxable territory;

(g)    the location of the fixed land line through which the service is received by the recipient is in the taxable territory.

Case 13 For all other type of services

(i.e. other than listed in Case 1 to Case 12 above)

  • Location of recipient of services
  • In case location of recipient of services is not available, location of supplier of services will be Place of supply 

Related Articles:

How to determine Place of Supply of Services in GST in India (Other than Import/Export)

Relevancy/concept of determination of Place of Supply in GST in India

Online Information and Database Access or Retrieval services or say OIDAR services : An equal hit for person located in Non – Taxable Territory (i.e. out of India)

What is the meaning and relevance of Location of supplier of Service for GST in India?

What is the meaning and relevance of Location of recipient of Service in GST in India?

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