In this article, we will discuss how to determine place of supply of services where “Location of Service Provider” and “Location of Service Receiver” both are within India.
| Law reference:
Section 12 (IGST) |
Place of Supply of SERVICES other than import/export of services i.e. where Location of Service provider and Location of Service Receiver, both are within India |
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Situation of Supply |
Place of Supply will be |
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| Case (a) Immovable Property situated in India | ||
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1) |
Any Services Provided directly in relation to immovable property/boat/vessel (including Architects, interior decorators, surveyors, engineers and other experts and estate agents) |
Location of such immovable property/boat/vessel |
| 2) |
Any service provided by way of grant of right to use immovable property |
Location of such immovable property/boat/vessel |
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3) |
Carrying out any construction work |
Location of such immovable property/boat/vessel |
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4) |
Co-ordination in any construction work |
Location of such immovable property/boat/vessel |
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5) |
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 |
Location of such immovable property/boat/vessel |
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6) |
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 |
Location of such immovable property/boat/vessel |
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7) |
any services ancillary to the services referred to in above points |
Location of such immovable property/boat/vessel |
| Other relevant points :
Reverse charge mechanism: If a person of Haryana takes services listed at Sr. No. 2, 5 & 6 from Chandigarh’s supplier who is unregistered in GST, there is no need to pay GST under Reverse Charge, because it is just an intra- State supply in Chandigarh to a person not registered in same state/UT. Input Tax Credit : If a person of Haryana takes services listed at Sr. No. 2, 5 & 6 from Chandigarh’s supplier who is registered in UTGST, ITC will not be allowed for such GST paid to supplier, because it is just an intra- State supply to a person not registered in same state/UT i.e. in Chandigarh. Further, it is provided that 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, and in the absence of such contract or agreement, on such other basis as may be prescribed. When Immovable property is situated in India, there is nothing to do with “Location of Recipient”. However, if the immovable property is situated out of India, and Location of service provider and Location of service recipient is in India, then, Place of Supply will be Location of Recipient, (i.e. Location of service recipient is the sole decisive test). Government is trying to push GST income from every single penny of spending by Indian person. |
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| Case (b) | Immovable Property situated Out of India
(All services listed from point 1 to 7 in Case (a)) |
Location of Service Recipient i.e. If a company in India hires a Farmhouse in London for a Business Function from a person located in India, then, it will be considered as normal supply in India, Indian Company have to pay GST to provider of services. |
| Case (c) | Services provided in relation to :
>Restaurant and catering services, > personal grooming, fitness, > beauty treatment, > health service including cosmetic and plastic surgery |
Location where services actually performed. |
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Case (d) |
Training and Performance appraisal to a Registered Person |
Location of such Registered Person |
| Example:
In Case, a GST registered company based in Delhi provides Training program to its employees from a person of Shimla, then, place of supply will be considered as Delhi and the person belonging to Shimla will raise invoice with IGST. |
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| Case (e) |
Training and Performance appraisal to a Unregistered Person |
Location where these services are actually performed |
| Case (f) | Admission to :
> Cultural > Artistic > Sporting > Scientific > Educational > Entertainment event > Amusement park or > Any other place and > Services ancillary thereto |
Location where the event is actually held or Where the park or such other place is located. |
| Case (g) | Organization of :
> Cultural > Artistic > Sporting > Scientific > Educational > Entertainment event (including services in relation to conference, fair, exhibition, celebration or similar events) And / or > Services ancillary thereto organization of any of above events or assigning of sponsorship to such events |
1) Where Event organized within India:
a) Where Service recipient is Registered Person : – Location of such person b) Where Service recipient is Unregistered Person : – Location where such event actually held (Also Read Explanation) 2) Where Event organized outside India: Location of the recipient |
Explanation to Case (g) – for supply to Unregistered Recipient where event is organized in India :-
“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.”
| Case (h) | Services Provided by way of :
Transportation of Goods including by mail or courier |
a) Where Service recipient is Registered Person : – Location of such Recipient b) Where Service recipient is Unregistered Person : – Location where such goods are handed over to transporter for transportation |
However, where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods. {Applicable w.e.f. 01 Feb 2019}
| Case (i) | Services Provided by way of :
Transportation of Passengers |
a) Where Service recipient is Registered Person : – Location of such Recipient b) Where Service recipient is Unregistered Person : – Location from where passenger embarks on the conveyance for a continuous Journey |
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Case (j) |
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 |
Where supply:
(a) made to a registered person:- place of supply shall be the location of such person (b) made to any person other than a registered person shall be:- (i) Location of recipient of services as per the records of the supplier of services; (ii) and, where address of recipient is not available, then, the location of the supplier of services. |
Explanation.––For the purposes of this clause, 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.
| Case (k) | Supply of Services on Board a Conveyance
(including a vessel, an aircraft, a train or motor vehicle) |
Location of first Scheduled point of departure of that Conveyance for the journey |
| Case (l) | Supply of Banking and other financial services
(including Stock brokerage services) |
a) Location of recipient of services as per the records of the supplier of services b) and, where address of recipient is not available, then, the location of the supplier of services |
| Case (m) | Supply of Insurance services |
a) Where Service recipient is Registered Person : – Location of such Recipient b) In any other case : – Location of recipient of services as per the records of the supplier of services |
| Case (n) | Supply of Telecommunication Services Including:
> Data Transfer > Broadcasting > Cable and direct to home Television Services |
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| Services by way of :-
> Fixed Telecommunication Line > Leased circuits > Internet Leased Circuit > Cable or Dish Antenna |
Place of Supply of Services will be the location where these are installed to provide service to Recipient. e.g. fixed telecommunication line will be installed at the office of recipient and hence, place of supply will be office of recipient |
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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. |
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| Services of :
> Mobile connection for Telecommunication > Internet Services On Post – paid basis |
Place of supply will be location of Billing Address of the recipient of services on the record of supplier of services |
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Services of :
> Mobile connection for Telecommunication > Internet Services > Direct to Home (DTH) Television services On Pre – paid basis through voucher or any other mean |
(i) Principal supplier to selling agent:
Place of supply will be location of a selling agent or a re-seller/distributor of SIM cards or re-charge vouchers (address will be considered as per records of Principal Supplier at the time of supply) (ii) Selling Agent/Distributor to Final Subscriber: Place of Supply will be the location where pre-payment is received or such vouchers are sold |
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In case, where place of supply could not be decided as per above said provisions, place of supply will be location of recipient as per the records of the supplier of services (e.g. 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) and where such address is not available, the place of supply shall be the location of supplier of services. |
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| Case (o) | Supply of Advertisement Services to:
> Central Govt > State Govt > A Statutory Body > Local Authority meant for States or UTs identified in Contract or agreement |
Place of Supply shall be taken as being in each of such state and/or UT identified in Contract/agreement And Value of service shall be in proportion as per the terms of Contract or Agreement or where no such terms defined, as per the manner prescribed in Valuation Rules |
| Case (p) | In any other case
{i.e. services other than those listed from Case (a) to Case (o)} |
Where supply:
(a) made to a registered person shall be the location of such recipient person; (b) made to any person other than a registered person shall be,– (i) Location of recipient of services as per the records of the supplier of services; (ii) and, where address of recipient is not available, then, the location of the supplier of services. |
Also read :-
How to determine place of supply where service provided in different states/UT in single contract
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