Place of Supply in GST with Examples

Table of Contents

1. Introduction

2. Legal Framework

3. Importance of place of supply

4. Types of Supply

5. Place of supply of Domestic transactions involving goods

6. When Place of Supply cannot be determined as above

7. Place of supply of Goods imported into, or Exported from India [Cross Border Transactions]

8. Place of supply of Services where location of supplier of service and the location of the Recipient of service is in India: [Domestic transaction in services]

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1. Introduction

GST is a destination based tax wherein the tax is payable in the state where goods and services are finally consumed. The taxes under GST may be CGST, SGST, UTGST and IGST. In order to determine the type of GST, the nature of supply is to be ascertained. This nature may be either Inter-state or Intra-state. The supply of goods imported into, or exported from India is treated as Inter-state supply.

Place of supply and location of supplier are the two major determinants, while deciding the nature of supply. The supply may be domestic or cross-border. The Domestic supply may further be within or outside the state. This bifurcation is applicable not only for goods but also for services.

The statutory provisions as regards above have been discussed in this chapter.

2. Legal Framework

The provisions regarding place of supply of goods or services are provided in Chapter V of IGST Act, vide sections 10-14.

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

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

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

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

Section 14: Special provision for payment of tax by a supplier of online information and database access or retrieval services

3. Importance of place of supply

Place of supply is important to determine the kind of tax that is to be levied. The IGST is levied in case of inter-state supply whereas CGST and SGST become applicable in case of intra state supply. Whether a supply is inter-state or intra state, it depends upon the location of supplier and the place of Supply.

When the location of supplier and the place of supply are in two different States, it will be an Inter-State supply and IGST will be applicable but when the two are in the same State, then it will be an Intra-State supply and CGST & SGST/UTGST is applicable.

Table 1

Case	Location of Supplier	Place of Supply	Whether location of supplier and the place of supply are in the same State	Whether inter-State/ intra-State
1	Kerala	Bihar	NO	Inter-State (IGST)
2.	Puducherry	Puducherry	YES	Intra-State (CGST& Puducherry GST)
3.	Chandigarh	Chandigarh	YES	Intra-State (CGST + UTGST)
4.	Chandigarh	Punjab	NO	Inter-State (IGST)
5.	Chandigarh	Daman & Diu	NO	Inter-State (IGST)
6.	Goa	Goa	YES	Intra-State (CGST + Goa GST)
7.	Karnataka (SEZ)	Karnataka (non-SEZ)	Special case	Inter-State

Thus, it is very important to understand the two phrases and the manner of determination of the two.

3.1 Location of supplier of Goods

The word ‘location’ refers to the site or premises i.e. the geographical point. Location of supplier of goods is the site/premises of supplier where the supplier is situated together with the goods under his control, ready to be supplied. Thus, it is usually the place from where a supply is made. In GST registration certificate, a place is mentioned as a principal place of business and it may be taken as location of supplier.

3.2 Location of supplier of Services

The section 2(15) of the IGST Act, 2017 gives the meaning of “Location of Supplier of Services”. The definition may be summarized in the table given below:

	Situation	Location of Supplier of Services
(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, that is to say, a fixed establishment elsewhere	the location of such fixed establishment;
(c)	where a supply is made from more than one establishment, whether the place of business or fixed establishment	the location of the 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.

3.3 Location of Recipient of Services

The Location of Recipient of Services is defined by Section 2(14) of the IGST Act. It may be summarized in the table given below:

	Situation	Location of Supplier of Services
(a)	where a supply is received at a place of business for which registration has been obtained	the location of such place of business;
(b)	where a supply is received at a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere	the location of such fixed establishment
(c)	where a supply is received at more than one establishment, whether the place of business or fixed establishment	the location of the establishment most directly concerned with the receipt of the supply
(d)	in absence of such places	the location of the usual place of residence of the recipient

The term “place of supply” is a legal term and its meaning should be understood with the legal intent and not in common parlance.

GST is a destination based consumption tax but no provision of law clarifies this concept. The provisions of ‘place of supply’ fully bridge this missing link. In each case of supply, the law makers have declared the place of supply. It is the place of supply that will have right of accrual of revenue.

4. Types of Supply

The GST laws have integrated the goods and services under the common name “supply”. Considering the need of the given chapter, the supplies may be divided on two bases, namely- Geographical basis and the purpose of recipient.

4.1 Geographical Basis

The geographical boundaries of a country are very important in determination of any type of tax liability. Under GST also, the place of recipient and the place of supplier play significant role in deciding the type of supply. On such basis, there can be following two types of supplies:

(a) Domestic Supply

(b) Cross border supply

(a) Domestic Supply: It refers to those supply or transactions, where the supplier and recipient of Supply, both are located in India. The supply of goods or services is within India.

(b) Cross border supply: It is basically supply of goods or provisioning of services exported out of India or imported into India. Section 11 deals with statutory provisions for determination of place of supply of ‘GOODS’ imported into, or exported from India. Similarly, section 13 deals with statutory provisions for determination of place of supply of ‘SERVICES’ where location of supplier or location of recipient is outside India.

4.2 Purpose of Recipient

When supply is made in terms of goods or services, the recipient may be the end consumer or another business entity, for which it is an inward supply. On such basis, the supply may be classified as:

(a) Business to Business Supply (B2B Supply)

(b) Business to Consumer Supply (B2C Supply)

This determination is very essential in finding out the place of supply.

(a) Business to Business Supply: It is commonly abbreviated as B2B. Under this type of supply, both the supplier and the recipient are businesses. It means the supplies are used by the recipient in the course of furtherance of the business. The tax paid by the recipient shall be available as input tax credit.

For Example: If an event management company hires the services of a caterer, in the course of or in furtherance of their business, then it is a B2B supply.

(b) Business to Consumer Supply: It is commonly abbreviated as B2C. Under this type of supply, the recipient is the final consumer. In other words, it is a transaction between a business and a consumer. Accordingly, no credit of Input tax is allowed to the consumer.

Suppose, Mr. Sharma hires the services of a caterer on the occasion of marriage of his daughter. In this case, the recipient is end user. No question arises about availability of ITC to Mr. Sharma. This type of supply is a B2C supply.

Difference between B2B and B2C Supply

	B2B Supply	B2C Supply
1.	It refers to Business to Business Supply.	It refers to Business to Consumer Supply.
2.	The two parties are ‘Business’ and ‘Business’.	The two parties are ‘Business’ and ‘Consumer’.
3.	The recipient is acting in the course of or in the furtherance of his business.	The recipient is the end user.
4.	The recipient can claim ITC.	No question arises about availability of ITC.

5. Place of supply of Domestic transactions involving goods

The section 10(1) of the IGST Act has provided the five rules for determination of place of supply of domestic transactions, which are as follows:

(a) Supply involving movement of goods

(b) Goods delivered on bill to ship to model

(c) Supply not involving movement of goods

(d) Goods assembled/installed at site

(e) Goods supplied on board a conveyance

The Section 10(2) provides that if the place of supply cannot be determined as per any of the above rules as given in section 10(1), the government may prescribe the manner to ascertain the place of supply.

These rules and sub-rules are discussed in detail in the following paragraphs.

5.1 Supply involving movement of goods

As per Section 10(1)(a), “Where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient.”

In the case of supply, involving movement of goods, the place of supply is the location of the goods at the time when the movement of goods terminates (ends) for delivery to the recipient. The movement can be undertaken by the supplier or the recipient. It may even be taken by any other person after the supplier or the recipient discloses the destination to the person.

Who can undertake the movement of goods:

The movement of goods can be undertaken by:

(i) The supplier or

(ii) The recipient or

(iii) Any other person (like transporter) after having disclosed the destination of the movement of goods.

Example 1:

Sharma Private Limited (Delhi) sells 40 units of certain goods to Manish Limited (Bengaluru). The goods are delivered in Bengaluru through transport arranged by Sharma private Limited (i.e. the supplier). Here, the movement of goods terminates for delivery at Bengaluru. Place of Supply: Bengaluru (Karnataka) Location of Supplier: Delhi Nature of Supply: Inter-state liable to IGST

Example 2:

Muskan Limited (Delhi) is a registered dealer in Mumbai, Maharashtra. It supplies 40 washing machines to VIVA Electronics (a registered dealer) of Jaipur, Rajasthan. VIVA Electronics has taken the washing machines from supplier’s ex-factory at Mumbai. The transport is arranged by the buyer. Here, the supply involves movement of goods by the recipient and Jaipur is the place where the movement of washing machines terminates for final delivery to the recipient. Place of Supply: Jaipur (Rajasthan) Location of Supplier: Mumbai (Maharashtra) Nature of Supply: Inter-state liable to IGST

5.2 Goods delivered on “Bill to ship to” Model

As per section 10(1)(b) where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person.

In this situation, there are three parties involved:

(a) The supplier

(b) The Recipient

(c) The 3rd party on whose instructions the goods are delivered.

The first party is the supplier of goods who delivers the same to the second party, the recipient. This delivery is however, on the instructions of a third party i.e., the buyer who may be acting as an agent or on his own account. It is deemed that the third person has received the goods and the place of supply is the principal place of business of such third person.

Technically, in this case, there are two supplies. The first is from the supplier to third person and the second is between the third person and the recipient. But, this section captures only the first supply between supplier and third person. Therefore, the place of supply will be the principal place of business of third person.

Example 3:

A of ‘Maharashtra’ supplied goods to B of ‘Delhi’. When goods start moving, B instructs the supplier i.e. Mr. A to deliver the goods to ‘C’ at Ahmedabad on his behalf. Now, in this example, the place of supply will be Delhi as per section 10(1)(b) of the IGST Act, 2017.

Example 4:

Mr. Vimal (a supplier registered in Punjab having principal place of business in Ludhiana) asks Mr. Sumit of Agra, UP to deliver 25 fabric knitting machines to his buyer Mr. Nikunj at Alwar, Rajasthan. This is the example ‘BILL TO – SHIP TO’ Model. There are three parties: (a) Supplier (Mr. Sumit) (b) Recipient (Mr. Nikunj) (c) Third party on whose instructions the goods are delivered (Mr. Vimal) In this case, basically two supplies are involved: (i) Between Vimal and Nikunj (ii) Between Sumit and Vimal The first supply (i.e. between Vimal and Nikunj) is covered under section 10(1)(a) and the second supply (i.e. between Sumit and Vimal) is “BILL TO-SHIP To” transaction covered under section 10(1)(b). Accordingly for latter supply, the place of supply of goods is not the location of delivery of such goods (Alwar) but the principal place of business of third person i.e. Mr. Vimal located at Ludhiana. Place of Supply: Ludhiana, Punjab Location of Supplier: Agra (UP) Nature of Supply: Inter-state liable to IGST

Example 5:

Ritu limited (Noida, UP) instructs Kamal Limited (Agra, UP) to supply certain goods to Mr. Varad of Jaipur, Rajasthan. Accordingly, Kamal Limited supplies the specified goods to Mr. Varad, on behalf of Ritu Limited. Here, Kamal Limited: Supplier Varad Limited: Recipient Ritu Limited: Third party As per section 10(1)(b), it shall be deemed that the said third person (Ritu Limited) has received the goods. Thus, the place of supply shall be the Principal place of business of third person (Ritu limited) on whose instructions the goods are delivered. Therefore,: Place of Supply: Noida, UP Location of Supplier (Kamal Limited): Agra (UP) Nature of Supply: Intra-state liable to CGST & SGST

5.3 Supply not involving movement of goods

As per Section 10(1)(c) “Where the supply does not involve movement of goods, (whether by the supplier or the recipient), the place of supply shall be the location of such goods at the time of the delivery to the recipient”. Here, it is not intended to cover cases where it is difficult to move, but to cover those cases where the supply demands that good ought not to move.

If the supply does not involve movement of goods, the place of supply is the location of goods at the time of delivery to the recipient.

Example 6:

X took a building on rent from Mr. Y. He bolted a machinery on the floor of the building. After three years he vacated the building but agreed with the land lord to leave behind the machinery for the land lord without dismantling it. The supply of machinery by the tenant to the Landlord does not involve movement of goods and the place of supply shall be where the machine is fixed.

Example 7:

H. B. Leasing Limited (Madurai, Tamil Nadu) has leased his machine (Cost Rs. 28,00,000) to Mr. Prateek (Alwar, Rajasthan) for use in manufacturing at monthly rent of Rs. 40,000. After 2 years, Prateek requested the lessor company to sell the machine to him for Rs. 10,00,000, which is agreed to by H. B. Leasing Limited. In this case, there will be no movement of goods and the same will be sold on “as is where basis is”. Therefore, the location of the machine at the time of such sale will be the place of supply i.e. Alwar Place of Supply: Alwar, Rajasthan Location of Supplier: Madurai, Tamil Nadu Nature of Supply: Inter-state liable to IGST

Example 8:

Swami Limited (Mysore) opens a new branch office at Pune, Maharashtra. It purchases a building for office from Shah Bros. (Pune) along with pre-installed furniture and computers. Though there will be no GST liability on purchase of building, but office furniture and computers will be liable to GST. Since there is no movement of office furniture and computers, the place of supply of such goods is their location at the time of delivery to the recipient (Swami Limited) i.e. Pune, Maharashtra.

5.4 Supply involving Installation or Assembly of Goods

As per Section 10(1)(d), “Where the goods are assembled, or installed at site, the place of supply shall be the place of such installation or assembly.” It is important to distinguish this installation or assembly from “works contract.” Works contract under GST is treated as supply of service and the provisions of this section are therefore not applicable. Thus, if the supply involves goods which are to be installed or assembled at site, the place of supply is the place of such installation or assembly.

Example 9:

A purchases a Machine from B, where both A and B are in Delhi. The Machine, however, needs to be installed in Faridabad (Haryana). The place of supply will be Faridabad (Haryana) as the Machine is installed in Faridabad. Location of Supplier Delhi, Place of Supply Haryana : IGST will be applicable.

Example 10:

Ruchi Soya Limited (Meerut, UP) gives a contract to BHEL Limited (Bilaspur, Himachal Pradesh) to supply a heavy motor machine which is required to be assembled in a factory located in Manali, Himachal Pradesh. The place of supply is the site of assembly of machine, i.e. Manali even though Ruchi Soya is located in UP. Place of Supply: Manali, Himachal Pradesh Location of Supplier: Bilaspur, Himachal Pradesh Nature of Supply: Intra-state liable to CGST & SGST

5.5 Goods supplied on Board a Conveyance

As per Section 10(1)(e), “Where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board. The supplier may himself supply the goods to the passengers, like sales man of a particular company selling packed eatables which they carry along specifically for the purpose of sale or the goods sold to the operator of the conveyance and the operator selling to the travelling passengers. In the second case, there are two supplies, the first is the supply to the operator of conveyance and second is the supply by the operator of conveyance to the passengers on board during the journey. In the second case, this section covers the second supply from the operator of the conveyance to the passengers on board during journey.

The place of supply of goods supplied on board a conveyance like aircraft, train, vessel, motor vehicle, etc. is the location where such goods have been taken on board. These goods are sold during the journey on board a conveyance.

Example 11:

Mr. Z boarded the train at New Delhi for its destination Mumbai. He carried some goods with him for the purpose of sale during the journey. When the train reaches Surat, he sells certain goods. Now, in this case the place of supply of such goods will be New Delhi i.e. the location at which the goods are taken on board.

Example 12:

Ms. Deepa (Delhi) boards the Delhi-Mumbai train at Delhi. During the journey, she sells the goods at Vadodara which were taken on board by her at Delhi. The place of supply of goods is the location at which the goods are taken on board i.e. Delhi and not Vadodara where they have been sold. Place of Supply: Delhi

6. When Place of Supply cannot be determined as above

Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed. Where none of the above provisions are applicable to determine the place of supply of goods, the Central Government will prescribe rules on the recommendations of the GST Council regarding the manner of its determination. However, it must be ensured before taking recourse to residual provisions that the Supply is one which is not already covered by any of the earlier sub-sections.

7. Place of supply of Goods imported into, or Exported from India [Cross Border Transactions]

Place of supply of goods where the goods are imported into or exported from India will be determined in accordance with section 11 of the IGST Act. Import of goods is defined in section 2(5) of the IGST Act and export of goods is defined in section 2(10) of the IGST Act. It must be noted that the payment in convertible foreign exchange is not a criterion for determining import and export of goods but it is relevant in case of services and transactions involving goods treated as services. Another aspect worth noting is, if the goods move from one foreign country to another foreign country without entering into India it will not be a supply in taxable territory even if the supplier is in India.

The place of supply in cases involving import and export of goods is determined as per the provisions of section 11 of the IGST Act, 2017.

7.1 Export of goods

When goods are exported from India, then the place of supply of such goods shall be the location outside India i.e. the place where the goods have been exported. “Export means taking goods out of India to a place outside India”. Such export of goods have been treated as inter- state supply but no GST is payable as it has been declared as Zero rated supplies.

7.2 Import of goods

If the goods have been imported into India, the place of supply of goods is the place where the importer is located. In this regard, Import has been defined as bringing into India from a place outside India. It is treated as inter-state supplies and it attracts IGST along with Customs Duties. In the case of some products like Pan Masala, GST compensation cess is also levied.

Example 13:

Z of Chennai imported goods from USA. The place of supply will be Chennai i.e. the location of Importer.

Table 2 Import of Goods

Case	Location of Supplier	Place where goods are located before supply	Place where the goods are supplied	Location of importer	Place of Supply
1.	England	England	Delhi	Delhi	Delhi
2.	Haryana	USA	Denmark	Punjab	Not an import
3.	USA	USA	Nagpur	Delhi	Delhi

8. Place of supply of Services where location of supplier of service and the location of the Recipient of service is in India: [Domestic transaction in services]

As per section 12 of the IGST Act, 2017, when the location of supplier of service and the location of recipient of service is in India, the place of supply of services is governed by

(a) General Provisions

(b) Specific Provisions

8.1 General Provisions [Section 12(2)]

The general provisions are applicable only if the supply of service does not fall in any of the specific cases provided under section 12.

(a) When the recipient is registered person

In case, the recipient is a registered person, the location of such registered person shall be the place of supply. For Example: A supplies services to B, who is a registered person. In this case, the place of supply will be the location of such registered person i.e. the location of B.

(b) When the recipient is unregistered person

In case, the recipient is a unregistered person, the place of supply will still be the location of recipient, if the address of recipient exists on record. This means the supplier has taken the address and other details of the recipient at the time of supply of services.

However, in case the address of recipient does not exist on record, then place of supply of service would be the location of the supplier. For Example: A of Delhi supplies services to B of Pune. B is not a registered person. A does not have any address of B in his records. Here, the place of supply will be the location of the supplier i.e. Delhi, the location of Mr. A.

The above provisions can be summarized as under:

	Supply of Service made to ………..	POS of Services
(a)	Registered Person	Location of Recipient
(b)	Unregistered Person and Location of Recipient is available	Location of Recipient
(c)	Unregistered Person and Location of Recipient is NOT available	Location of Supplier

Example 14:

A provides designing services to an Advertisement Company. The recipient company is a registered person. The location of recipient i.e. the location of the advertising company will be the place of supply.

Example 15:

Mr. A supplies services to Mr. B in India. Mr. B is not a registered person but A has the address of B in his records. The place of supply will be the location of B.

Example 16:

A Barber provides services to so many customers daily but he does not record their names and addresses. The place of supply will be the location of the Barber.

8.2 Specific Provisions

The general provisions do not appropriately cover all situations of provisions of services. Therefore, special provisions are applicable for specific services. These are provided in sub-section (3) to sub-section (14) of section 12. These are discussed as follows:

8.2.1 Services in relation to an immovable property/boat/vessel [Section 12(3)]

Section 12(3) covers supplies of services which are in relation to an immovable property or a boat or a vessel. These services are classified as follows:

Category	Service	Place of Supply	Example
(a)	Services provided directly in relation to an immovable property including those by architect, interior decorator, surveyor, engineer, related experts and estate agent.	The location of immovable property or the boat or the vessel is the place of supply. Where the immovable property extends to more than one state/union territory, the services is deemed to have been supplied in each of the respective states/Union territories proportionately in terms of the value of the services. Where the services are provided outside India, Location of the recipient Note: The lines given above along with the paragraph appearing under same Column in previous page is applicable to all the Categories from (a) to (e)	X provided architectural services to Y of Delhi. X and Y are registered under GST. X has place of business in Nagpur. The building is situated in Delhi. The place of supply will be Delhi.
(b)	Service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work
(c)	Services provided by way of lodging, accommodation by a Hotel, Inn, guest house, home stay, Club, Campsite, house boat Vessel.		Suresh, a registered person has place of business in Ahmedabad. He visits Mumbai for business purpose and stays in a hotel there. The place of supply will be Mumbai where the Hotel is located.
(d)	Services provided by way of accommodation in an immovable property for organizing any marriage/reception or matters related thereto, official, social, cultural, religious or business functions including services provided in relation to such function at such property		A is a rich businessman of Delhi. He hosts the marriage of his daughter in the Udaipur fort in Udaipur Rajasthan. The place of supply of service will be Udaipur. In fact, all other services provided at the Udaipur Fort for the conduct of marriage will also have place of supply as Udaipur.
(e)	Services ancillary to the above-mentioned services.

The provisions relating to place of supply can be summarized as follows:

Nature of Supply		Location of immovable property/boat/vessel		Place of Supply
Supply of services relating to immovable property/boat/vessel, including accommodation therein.		In India		Location of such immovable property/boat/vessel
			Outside India		Location of the recipient

Computation of value of services where immovable property is located in more than one State and where the location of supplier and recipient is in India [New rule 4 of the IGST Rules (effective from 1-1-2019)]

Section 12(3) of the IGST Act provides that the place of supply of services, in relation to immovable property or a boat or a vessel, shall be the location at which immovable property or boat or vessel is located or intended to be located. However, in case where the immovable property or boat or vessel is located in more than one State/UT, the service is deemed to have been supplied in each of the respective States/UT, proportionately in terms of value of services determined as per rule 4 in the following manner:-

S. No.	Type of service in relation to immovable property	Factor which determines the proportionate value of service
(a)	Service provided by way of lodging accommodation by hotel, inn, guest house etc. and its ancillary services (other than the cases where such property is a single property located in 2 or more contiguous States/UT or both)	Number of nights stayed in such property Example 17: A hotel chain X charges a consolidated sum of ` 30,000 for stay in its two establishments in Delhi and Agra, where the stay in Delhi is for 2 nights and the stay in Agra is for 1 night. The place of supply in this case is both in the Union territory of Delhi and in the State of Uttar Pradesh and the service shall be deemed to have been provided in the Union territory of Delhi and in the State of Uttar Pradesh in the ratio2:1 respectively. The value of services provided will thus be apportioned as ` 20,000 in the Union territory of Delhi and ` 10,000 in the State of Uttar Pradesh.
(b)	All other services provided in relation to immovable property including Services by way of accommodation in any immovable property for organising any marriage or reception etc. Supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called where such property is a single property located in 2 or more contiguous States or/and UT Services ancillary to services mentioned above	Area of the immovable property lying in each State/UT Example 18: There is a piece of land of area 20,000 square feet which is partly in State S 1 say 12,000 square feet and partly in State S 2, say 8000 square feet. Site preparation work has been entrusted to T. The ratio of land in the two states works out to 12:8 or 3:2 (simplified). The place of supply is in both S1 and S 2. The service shall be deemed to have been provided in the ratio of 12:8 or 3:2 (simplified) in the States S1 and S 2 respectively. The value of the service shall be accordingly apportioned between the States.
(c)	Services by way of lodging accommodation by a house boat or vessel and its ancillary services	Time spent by the boat or vessel in each such State/UT, to be determined on the basis of declaration made by the service provider. Example 19: A company C provides the service of 24 hours accommodation in a houseboat, which is situated both in Kerala and Karnataka in as much as the guests board the house boat in Kerala and stay there for 22 hours but it also moves into Karnataka for 2 hours (as declared by the service provider). The place of supply of this service is in the States of Kerala and Karnataka. The service shall be deemed to have been provided in the ratio of 22:2 or 11:1 (simplified) in the States of Kerala and Karnataka, respectively. The value of the service shall be accordingly apportioned between the States.

Example 20 (Place of Supply of services directly in relation to immovable property)

In the light of section 12(3) of the IGST Act and the related proviso, the Place of Supply (POS) will be determined in the following manner: Situation POS Reason (a) Mr. X of Chennai hired the services of interior decorator Mr. Y of Surat for redoing his home in Singapore. Chennai Since the property is located outside India, therefore, as per proviso to section 12(3) of the IGST Act, 2017, the place of supply will be Chennai, being the location of recipient. (b) Atul of Delhi entered into a lease agreement with Manish of Delhi whereby he leased out his farm in Faridabad to Manish. Faridabad Any service provided by way of grant of rights to use immovable property is covered under section 12(3). Though both the supplier and the recipient are in Delhi but the POS shall be the location of immovable property, here being Faridabad. (c) Shahrukh Khan of Mumbai purchased a bungalow in USA. He hires Bangalore based architect to design a structure for his bungalow. Mumbai Since the immovable property is located outside India, therefore, as per proviso to section 12(3) of the IGST Act, 2017, the place of supply will be Mumbai, being the location of recipient. (d) Mr. Vikram, an employee of “Viraj communication”, Delhi, goes on an official tour to Nagpur and stays in a hotel there, booked in the name of his company. Nagpur Section 12(3) covers accommodation service. The place of supply shall be location of immovable property.

8.2.2 Restaurant service, personal grooming/fitness/beauty and health services [Section 12(4)]

The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery is the location where such services are actually performed.

Example 21:

Z stays in Delhi but visits a nearby Gymnasium in Noida (UP). The place of supply will be Noida, where services are actually performed.

8.2.3 Training and performance appraisal services [Section 12(5)]

The place of supply of services in relation to training and performance appraisal depends upon whether the supply is B2B or B2C. In B2B supply i.e., where the recipient of service is a registered person, the place of supply is the location of such person. However, in case of B2C supply i.e., where the recipient of service is unregistered, the place of supply is the place where the service is actually performed.

Type of service		Place of Supply
			B2B Supply		B2C Supply
Training and performance appraisal		Location of registered Recipient		Location where the services are performed.

Example 22:

Z carries performance appraisal of the employees of XYZ a firm which is not registered under the Act. XYZ is located in Moradabad but appraisal was conducted in Nainital. As XYZ is not registered, the place of supply shall be the place where services are actually performed i.e. Nainital.

8.2.4 Services by way of admission to events/amusement park/other places [Section 12(6)]

The place of supply of following services-

S.No.	Supply	Place of Supply	Example
1.	Services provided by way of admission to certain events	Place where the event is actually held or where the park or such other place is located.	Z comes to visit Shimla from Delhi. He enjoys a play in a theatre in Shimla and pays for the same. The place of supply will be the place where the play is actually held and the theater is located i.e. Shimla.
2.	Services provided by way of admission to amusement park or any other place
3.	Services ancillary to the above- mentioned services

8.2.5 Organisation of events [Section 12(7)]

The Place of Supply is dependent on whether the Recipient is registered or unregistered.

When such service is provided to a registered person, the place of supply is location of recipient. When it is provided to an unregistered person, the place of supply is the location where the event is actually held and if the event is held outside India, the place of supply is the location of recipient.

Type of Service		Place of Supply
			Recipient is registered		Recipient is unregistered
Organisation of events or services ancillary to the same or assigning of sponsorship to such events. For example cultural, artistic, sporting, scientific, educational or entertainment event, conference, fair, exhibition, celebration or other similar event		Location of recipient (in all Cases)		Location where the event is held
Organisation of “events outside India”				Location of recipient

If the event is held in more than one State/Union Territory and a consolidated amount is charged for services relating to such event, the place of supply of such services is deemed to be in each of the respective States/Union territories in proportion to the value for services.

Example 23:

A company having place of Business in Hyderabad (Andhra Pradesh), duly registered under GST, hires the services of X of Delhi for organizing promotional events for the company at all the metropolitan cities. The place of supply is Hyderabad, as “A” is a registered company. If A is not registered, the place of supply will be each place where the event is held.

Example 24:

In the Example 23, if events were held in New York and London, the place of supply would be the location of recipient i.e. still Hyderabad.

Computation of value of services where event is organised in more than one State and where the location of supplier and the recipient is in India [New rule 5 of the IGST Rules (effective from 1-1-2019)]

Section 12(7) of the IGST Act provides that when services provided by way of organisation of events including services ancillary to such organisation or assigning of sponsorship to such events, is provided to an unregistered person, the place of supply of such service is the location where the event is actually held.

If the event is held in more than one State/UT and a consolidated amount is charged for services relating to such event, the place of supply of such service is deemed to be in each of the respective State/UT in proportion to the value of services determined in terms of the contract or agreement entered into in this regard. In the absence of any such contract or agreement, the value is determined in accordance with Rule 5 by the application of generally accepted accounting principles.

Example 25:

An event management company E has to organize some promotional events in States S1 and S2 for a recipient R (unregistered). 3 events are to be organized in S1 and 2 in S2. They charge a consolidated amount of ` 10,00,000 from R. The place of supply of this service is in both the States S1 and S2. Say the proportion arrived at by the application of generally accepted accounting principles is 3:2. The service shall be deemed to have been provided in the ratio 3:2 in S1 and S2 respectively. The value of services provided will thus be apportioned as ` 6,00,000 in S1 and ` 4,00,000 in S2.

8.2.6 Transportation of goods including mails [Section 12(8)]

The place of supply of services by way of transportation of goods including by mail, or courier, etc. provided to a registered person is the location of such person.

However, where such services are provided to an unregistered person, the place of supply is the location at which such goods are handed over for their transportation.

Type of Service		Place of Supply
			If Recipient is Registered		If Recipient is Unregistered
Services by way of transportation of goods including by mail, or courier, etc.		Location of recipient		Location at which such goods are handed over for their transportation.

A new proviso has been inserted in section 12(8) by IGST (Amendment) Act, 2018 vide Notification No. 01/2019-Integrated Tax, dt. 29-1-2019. This proviso lays down that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods. Therefore, in case where the location of supplier and recipient is in India and goods are transported to a place outside India, the place of supply of transportation service shall be the place of destination of such goods, i.e. outside India.

Example 26:

ABC is a registered Company in Kolkata. It hires the services of a courier company in Chennai to send some important documents from Chennai office to the New Delhi branch. Since the recipient ABC is registered the place of supply will be the location of recipient, i.e. Kolkata. If ABC had been unregistered, the place of supply would have been the location, where goods are handed over for their transportation i.e. Chennai.

Example 27:

X is working in an MNC in Bengaluru. He has been transferred to Pune. He hired the services of “Movers and Packers” to shift his household goods from Bengaluru to Pune. Since X is unregistered the place of supply is Bengaluru where the goods are handed over for their transportation.

8.2.7 Passenger transportation service [Section 12(9)]

The Place of Supply is dependent on whether the Recipient is registered or unregistered.

When such service is provided to a registered person, the place of supply is location of recipient. When it is provided to an unregistered person, the place of supply of passenger transportation shall be the place where the passenger embarks on the conveyance for a continuous journey.

Type of Service		Place of Supply
			Recipient is registered		Recipient is unregistered
Passenger transportation		Location of the recipient		Location where the passenger embarks on the conveyance for a continuous journey
Issue of right to passage for future use and the point of boarding not known at the time of issue of right		Location of the recipient		If the address of the unregistered person is avail-able in the records of the supplier, the location of such unregistered person. In other cases, the location of the supplier of services

Example 28:

Mr. C travels from Mumbai to Nagpur. C is registered person in Delhi and therefore the place of supply is the location of recipient which is Delhi.

Example 29:

Mr. A is unregistered person who lives in Kolkata. His address is known to the supplier. He boards a train at Jaipur to travel to Kolkata. The place of supply is Jaipur.

Example 30:

Mr. A buys a metro card in New-Delhi. He is entitled to use the card anywhere in Delhi, Faridabad, and Noida which is not predetermined at the time of buying the card. Here, the place of supply will be the location of the supplier of services i.e. New-Delhi. The Metro company does not have the address of Mr. A

Example 31:

Saksham books an air ticket from Delhi to Goa and back from Goa to Delhi. He buys the ticket in Gurgaon (Haryana). He is an unregistered person. The place of supply will be Delhi for the outward journey and Goa for the return journey.

8.2.8 Service supplied on board a conveyance [Section 12(10)]

For determining the place of supply of both goods and services supplied on board a conveyance, no distinction is made between registered and unregistered recipients.

Type of Service	Place of Supply	Example
Service supplied on board a conveyance such as vessel, aircraft, train or motor vehicle.	Location of the first scheduled point of departure of that conveyance for the journey	In India “Enjoy on wheels” is a train which runs from Jaipur to Kanyakumari and provides entertainment services. For outward journey the place of supply will be Jaipur and For Return Journey It will be Kanyakumari.

Example 32:

C is travelling from Mumbai to Ranchi. He watches a movie on board by making the payment. The place of supply will be Mumbai, the place of departure of the conveyance.

8.2.9 Telecommunication service [Section 12(11)]

Section 12(11) classifies the telecommunication services into 3 categories for the purpose of determining the place of supply. Telecommunication services includes the services of telephone, data transfer (internet), cable, DTH (Direct to home) services, etc. The place of supply for the three categories shall be understood from the following table:

	Supply	Place of Supply	Example
1.	Services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna	Place where the telecommunication line, leased circuit or cable connection or dish antenna is installed.	B takes a lease line connection at his house in Jaipur from C of Mumbai. The place of supply is the location of B where lease line is installed.
2.	Post-paid mobile connection and post-paid internet services	The billing address of recipient of services on the record of the supplier of services	A takes a post-paid telephone connection. Place of supply will be the address of A on records with the supplier.
3.	Pre-paid mobile connection and pre-paid internet and DTH services through a voucher or any other means	Through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, the address of the selling agent or the re-seller, as per the records of the supplier.
4.	In other cases	The address of the recipient as per the records of the supplier of services and if the address is not available the location of supplier.
5.	If payment is made through net banking or E mode	The address of the recipient as per the records of the supplier of services

Computation of value of services where leased circuit is installed in more than one State and where the location of supplier and the recipient is in India [New rule 6 of the IGST Rules (effective from 01.01.2019)]

Section 12(11)(a) of the IGST Act determines the place of supply of services in relation to telecommunication services provided using a fixed telecommunication line, leased circuits. Internet leased circuits, cable or dish antenna. The place of supply of such services is the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services.

If the leased circuit is installed in more than one State/UT and a consolidated amount is charged for supply of services, the place of supply is deemed to be in each of the respective States/UT in proportion to the value of services determined in terms of the contract or agreement entered into in this regard.

In the absence of any such contract or agreement, the value is determined in accordance with rule 6 in proportion to the number of points lying in the State/UT.

The number of points in a circuit is determined in the following manner:

S. No.	Number of Points	Example
(i)	In the case of a circuit between two points or places, the starting point or place of the circuit and the end point or place of the circuit will invariably constitute two points.	A company T installs a leased circuit between the Delhi and Mumbai offices of a company C. The starting point of this circuit is in Delhi and the end point of the circuit is in Mumbai. Hence, one point of this circuit is in Delhi and another in Maharashtra. The place of supply of this service is in the Union territory of Delhi and the State of Maharashtra. The service shall be deemed to have been provided in the ratio of 1: 1 in the Union territory of Delhi and the State of Maharashtra, respectively.
(ii)	Any intermediate point or place in the circuit will also constitute a point provided that the benefit of the leased circuit is also available at that intermediate point	Example 1: A company T installs a leased circuit between the Chennai, Bengaluru and Mysuru offices of a company C. The starting point of this circuit is in Chennai and the end point of the circuit is in Mysuru. The circuit also connects Bengaluru. Hence, one point of this circuit is in Tamil Nadu and two points in Karnataka. The place of supply of this service is in the States of Tamil Nadu and Karnataka. The service shall be deemed to have been provided in the ratio of 1:2 in the States of Tamil Nadu and Karnataka, respectively. Example 2: A company T installs a leased circuit between the Kolkata, Patna and Guwahati offices of a company C. There are 3 points in this circuit in Kolkata, Patna and Guwahati. One point each of this circuit is, therefore, in West Bengal, Bihar and Assam. The place of supply of this service is in the States of West Bengal, Bihar and Assam. The service shall be deemed to have been provided in the ratio of 1:1:1 in the States of West Bengal, Bihar and Assam, respectively.

8.2.10 Banking, financial and stock broking services [Section 12(12)]

The place of supply of banking and other financial services, including stock broking services to any person is the location of the recipient of services on the records of the supplier of services.

However, if the location of recipient of services is not on the records of the supplier, the place of supply is the location of the supplier of services.

Example 33:

A buys shares from a stock broker “C” in Mumbai. A resides in Kota (Rajasthan). Place of supply is the address of A in the records of “C”, which is Kota.

8.2.11 Insurance services [Section 12(13)]

The Place of Supply is dependent on whether the Recipient is registered or unregistered.

The place of supply of insurance services is the location of recipient when provided to a registered recipient.

If such services are provided to a person other than a registered person, the place of supply is the location of the recipient of services in the records of the supplier of services.

Example 34:

XY Ltd. is registered in Gurgaon and gets his assets insured. The place of supply is the location of recipient i.e., Gurgaon.

Example 35:

X is unregistered but he takes an insurance policy for his health. The place of supply is location of X i.e. the address of X in the records of the insurer.

8.2.12 Advertisement service to the Government [Section 12(14)]

 

Type of Service	Place of Supply
Advertisement service to the Central Government/State Government/Statutory body/Local authority meant for the State or Union Territory identified in contract or agreement	Each of such States or Union territories where the advertisement is broadcasted/run/played.

 

Example 36:

Delhi Government contracts with an advertisement agency for promotion of a major event to be held in Delhi. The government demands that the bill boards for the same be displayed all over India. The place of Supply will be all the States and the Union territories where the bill boards are displayed.

Dive Deeper:
[FAQs] Place of Supply for Goods under GST
FAQs on Value of Supply under GST
Scope and Type of Supplies under GST