Place of Supply under GST Act is very crucial concept because the GST is charged on basis of Place of Supply of goods or Services. Under GST law Tax is payable where goods or services are consumed.
For Example: – if the place of supply of goods or service is located in same State/UT then SGST/UTGST and CGST will be charged.
if the place of supply of goods or services is located in another State/UT then only IGST will be charged.
So, Place of supply is the base which determines the type of GST will be levied (CGST, SGST/UTGST or IGST). GST is Destination base tax. So, in order to determine the destination of consumption of goods & services, Place of supply has to determine.
In this chapter we will cover following topics: –
1. Place of Supply of Goods
1. Supply within India
1.Place of Supply in cases where goods are moved?
2. Where are goods not moved?
3. Supply of Goods on Conveyance?
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4. Supply other than above?
2. Supply Outside India
2. Place of Supply of Services
3. Special Provision for supply of online information or database.
1. Place of Supply of Goods
1. Supply within India
1. Place of Supply in cases where goods are moved?
POS shall be the place where movement of goods terminates, it means the last destination of goods where actually goods will have consumed.
We will further explain with following illustrations: –
Illustrations 1.
Mrs Radhika for Hoshiarpur, Punjab sell 10 Pcs of dresses to Mr Rahul from Jalandhar, Punjab
In that case, Place of supply is Jalandhar, Punjab. It is within the same state (Punjab) so, CGST & SGST will be charged.
As we explained earlier this is Intra-state supply.
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Illustrations 2.
If Mrs Radhika for Hoshiarpur, Punjab sell 10 Pcs of dresses to Mr Joy from Patna, Bihar.
In that case, Place of supply is Patna, Bihar. It is outside state (Punjab) so, IGST will be charged.
As we explained earlier this is Inter-state supply.
Illustrations 3.
Mrs Aman for Hoshiarpur, Punjab sell 10 Pcs of handmade antiques to Mr Sahib from Noida, Haryana and Mr Sahib request to Mrs Aman that to send goods to Mr Pawan form Jalandhar, Punjab
In that case, it will be assumed that the buyer from Noida has received the goods and So, POS is Noida, Haryana. It is outside state (Punjab) so, IGST will be charged.
This case is similar to E-commerce sale i.e. gifting to someone from an online shop like Amazon, PayTM and Flipkart etc.
Illustrations 4.
Mr Sarb from Hoshiarpur, Punjab sell 10 Pcs of handmade antiques to Mr Abhi from Faridabad, Haryana and Mr Abhi request to Supplier that he will arrange his own transportation and takes goods from Ex-factory.
In that case, it Supplier will deliver goods to the buyer at their Place Hoshiarpur, Punjab So, Place of supply is Hoshiarpur, Punjab. It is within the state (Punjab) so, CGST & SGST will be charged.
2. Where are goods not moved?
The goods which are not moved from one place to another like sell Studio setup installed in building the building.
Illustrations 1.
M/s Happy Movement Studio from Hoshiarpur, Punjab want to open their branch at Gagret, Himachal and they purchased old studio with the whole setup.
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In that case, there is no movement of goods so, Place of supply is a place of goods at the time of delivery. Place of supply is Gagret, Himachal. It is within the state (Punjab) so, CGST & SGST will be charged.
Illustrations 2.
M/s Happy Movement Studio from Hoshiarpur, Punjab want to open their branch at Parwanoo, Himachal and they ask M/s Studio Maker Ltd. From Kalka, Haryana
In that case, there is no movement of goods Because of M/s Studio Maker Ltd. From Kalka, Haryana will build a studio site, Place of supply is a place of the site where they did work. So, Place of supply is Parwanoo, Himachal. It is within the state (Punjab) so, CGST & SGST will be charged.
Note: – M/s Studio Maker Ltd. has to get GSTIN from Parwanoo, Himachal. They can opt register as a casual taxable person.
3. Supply of Goods on Conveyance?
In case of travelling by plane or train, the POS is the place from where food loaded in the plane or train.
Illustrations 1.
Mr Arun travels from Chandigarh to Delhi by plane and he purchases a cold drink while on the plane.
Because plane takes off from Chandigarh So, it was loaded from Chandigarh so POS is Chandigarh. The airline will charge UTGST and CGST on it because in most of the cases all airlines have a pan-India presence and will be registered in all states
4. Supply other than above
If the POS cannot be determined by above-prescribed manner then it shall be determined in the manner prescribed by Central Government on the recommendation of GST Council.
2. Supply Outside India
In the case of Import into India, the place of supply is the location of importer where goods are received.
On Import into India IGST will be charged under GST Law
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In the case of Export from India, the POS is a location outside India.
Export from India is fully exempted under GST Law