Place of Supply

Place of Supply 3

This Module Includes

3.1 Supplies in Territorial Waters
3.2 Detailed discussion on Place of Supply Provisions
3.3 Place of Supply- OIDAR Services
3.4 Case Studies and Illustrations on Place of Supply.

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Place of Supply
SLOB Mapped against the Module
1. To develop detail understanding of various provisions of Goods and Services Tax (GST) to facilitate
valuation, computation of tax liability including management of input tax credit.
2. To obtain detail knowledge about the provisions under GST relating to accounts and record, annual returns
and dispute resolution to ensure better compliance.
3. To facilitate strategic decision making by appropriate management of various indirect tax issues.

Module Learning Objectives

After studying this module, the students will be able to:
~ Understand place of supply importance and its applicability in case of supply of goods or services or both
in case of domestic as well as cross border transactions.
~ Explain the provisions relating to determination of place of supply of goods and services
~ Apply practically how to apportion consolidated values between States and UT’s using IGST Rules, 2017.

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Introduction 3
Place of Supply under GST – Important Definitions:
Section Term Provision
Sec. 2(4) Customs frontiers the limits of a customs area as defined in section 2 of the Customs Act, 1962
of IGST of India means
Sec. 2(5) Export of goods taking goods out of India to a place outside India
of IGST means
Sec. 2(6) Export of services the supply of any service when,––
of IGST means (i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service
in convertible foreign exchange or in Indian rupees wherever permitted
by Reserve Bank of India (w.e.f. 1-2-2019); and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8;
Sec. 2(10) Import of goods bringing goods into India from a place outside India
of IGST means
Sec. 2(11) Import of services the supply of any service, where––
of IGST means (i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;
Sec. 2(16) Non-taxable w.e.f. 1st October 2023, Section 2(16) of the Integrated Goods and Services
of IGST online recipient Tax (IGST) Act, 2017 Non-taxable online recipient:
means means any unregistered person receiving online information and database
access or retrieval services located in taxable territory.
Explanation: for the purposes of this clause, the expression “unregistered
person” includes a person registered soley in terms of clause (vi) of section
24 of CGST Act, 2017.
(Section 24(vi) of CGST Act, 2017, Persons who are required to deduct tax
under section 51 (TDS), whether or not separately registered under this Act).

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CBIC Circular No. 202/14/2023-GST dated 27-10-2023, Clarification relating to export of services as
provided in sub-clause (iv) of the Section 2(6) of the IGST Act 2017:
 RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports / imports in
INR through Special Rupee Vostro Accounts opened by Authorised Dealer Banks of correspondent bank(s)
of the partner trading country [subject to conditions stipulated under Regulation 7(1) of Foreign Exchange
Management (Deposit) Regulations, 2016 for opening of such accounts].
 The relevant provisions of the Foreign Trade Policy (FTP), 2023 also reiterate that export of services can take
place through the mechanism put in place regarding Special Rupee Vostro Account [subject to compliances
mandated under RBI’s Circular No.10 dated 11th July, 2022].
 When the Indian exporters, undertaking export of services, are paid the export proceeds in INR from the
Special Rupee Vostro Accounts of correspondent bank(s) of the partner trading country, opened by AD
banks, the same shall be considered to be fulfilling the conditions of sub-clause (iv) of clause (6) of section
2 of IGST Act, 2017, subject to the conditions/ restrictions mentioned in FTP 2023 & extant RBI Circulars
and without prejudice to the permissions / approvals, if any, required under any other law.
Section 2(17) of IGST Act, 2017: Online information and database access or retrieval services:
w.e.f. 1st October 2023, “online information and database access or retrieval services” means services whose
delivery is mediated by information technology over the internet or an electronic network and the nature of
which renders their supply impossible to ensure in the absence of information technology and includes electronic
services such as,––
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or
internet;
(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer
network;
(v) online supplies of digital content (movies, television shows, music and the like);
(vi) digital data storage; and
(vii) online gaming, excluding the online money gaming as defined in clause (80B) of section 2 of the Central
Goods and Services Tax Act, 2017 (12 of 2017.);

Section 7 of IGST Act, 2107: Inter-State Supply:

Supply of goods Supply of service
Section 7(1): Section 7(3):
Subject to the provisions of section 10, supply of Subject to the provisions of section 12, supply of
goods, where the location of the supplier and the place services, where the location of the supplier and the
of supply are in–– place of supply are in––
(a) two different States; (a) two different States;
(b) two different Union territories; or (b) two different Union territories; or
(c) a State and a Union territory, (c) a State and a Union territory,
shall be treated as a supply of goods in the course of shall be treated as a supply of services in the course of
inter-State trade or commerce. inter-State trade or commerce.

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Supply of goods Supply of service

Section 7(2): Section 7(4):
Supply of goods imported into the territory of India, Supply of services imported into the territory of India
till they cross the customs frontiers of India, shall be shall be treated to be a supply of services in the course
treated to be a supply of goods in the course of inter- of inter-State trade or commerce.
State trade or commerce.

Section 7(5): Supply of goods or services or both,––

(a) when the supplier is located in India and the place of supply is outside India;
(b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
(c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section,
shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

Section 8 of IGST Act, 2017: Intra-State Supply:

Supply of goods Supply of services
Section 8(1): Subject to the provisions of section 10, Section 8(2): Subject to the provisions of section 12,
supply of goods where the location of the supplier and supply of services where the location of the supplier
the place of supply of goods are in the same State or and the place of supply of services are in the same
same Union territory shall be treated as intra-State State or same Union territory shall be treated as intra-
supply: State supply:
Provided that the following supply of goods shall not Provided that the intra-State supply of services shall
be treated as intra-State supply, namely:–– not include supply of services to or by a Special
(i) supply of goods to or by a Special Economic Economic Zone developer or a Special Economic
Zone developer or a Special Economic Zone Zone unit.
unit;
(ii) goods imported into the territory of India till
they cross the customs frontiers of India; or
(iii) supplies made to a tourist referred to in section
15.
Explanation 1.––For the purposes of this Act, where a person has, ––
(i) an establishment in India and any other establishment outside India;
(ii) an establishment in a State or Union territory and any other establishment outside that State or Union
territory; or
(iii) an establishment in a State or Union territory and any other establishment being a business vertical
registered within that State or Union territory,
then such establishments shall be treated as establishments of distinct persons.
Explanation 2.––A person carrying on a business through a branch or an agency or a representational office in
any territory shall be treated as having an establishment in that territory.

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Supplies in Territorial Waters 3.1

Supplies in territorial waters (Section 9 of the IGST Act, 2017): -
(a) where the location of the supplier is in the territorial waters, the location of such supplier; or
(b) where the place of supply is in the territorial waters, the place of supply,
shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point
of the appropriate baseline is located.

Example 1
Repair services are provided by M/s X Ltd., in Delhi on ship moved off the coast (i.e. an area of land that is next
to the sea of Cochin for a shipping company from U.K., the place of supply of the repairs services will not be the
waters but Cochin itself.

Example 2
Oil and Natural Gas Company has on offshore (seaward) on the field off coast (seaboard) of Mumbai. Supplies
from such oil field would be deemed to be supplies from the State of Maharashtra.

Illustration 1
Sonu Traders, registered person in Maharashtra. In the month of September, it supplied taxable goods worth `50
lakh to Rose Oil Corporation Ltd. in the territorial waters. The said territorial waters are located at a distance of 8
nautical miles from the baseline of the State of Maharashtra and 9 nautical miles from the base line of the state of
Gujarat. You are required to determine the amount of net CGST and SGST and / or IGST payable in the month of
September. Applicable rate of CGST 9% and SGST 9% or IGST 18%.

Solution:
Place of Supply = Maharashtra (inter-State Supply).
CGST @9% is `4,50,000; and SGST @9% is `4,50,000.

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Detailed Discussion on Place

3.2
of Supply Provisions
While determining the levy of taxes based on Place of Supply, two things are considered namely:
1. Location of Supplier: It is the registered place of business of the supplier.
2. Place of Supply: It is the registered place of business of the recipient

Example 3
X Ltd. is a supplier of craft products, having the registered office in Chennai, Tamil Nadu. It supplies
goods to schools in Madurai, Tamil Nadu. Since, the location of supplier as well as the place of supply is in
the same State i.e. Tamil Nadu, it will be counted as ‘Intra-State Supply of Goods’ and hence SGST & CGST
will be levied.

Illustration 2
X Ltd., located in Mumbai, Maharashtra receives order from M/s Y Ltd. located in Ahmadabad, Gujarat for
supply of one machine.
Find the place of supply and applicable GST?

Solution:
1. Location of Supplier: Mumbai (Maharashtra).
2. Place of Supply: Ahmedabad (Gujarat)
Since the movement of goods terminate at Ahmedabad.
Applicable GST = IGST

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Simplified approach:

Place of
Supply

Outside
NO YES
India

Exempted Export of Goods/

Supply Services
NO

NO
Exempted
Supply

Intra-State
Supply

NO YES YES YES NO YES

GST = GST = 0%
GST = IGST GST = Nil GST = IGST
CGST & SGST (Zero Rated Supply)

Place of supply of Goods

As per section 10 of the IGST Act, 2017 Place of Supply of goods other than supply of goods imported into, or
exported from India, shall be as follows:

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Place of Supply of Goods (Other than Import or Export)

Supply involves
Supply does
movement of goods Goods
not Goods In any
(whether by delivered on Goods
involves supplied other
supplier or the direction assembled or
movement of on board a case
recipient or by any of third installed at site
goods [Sec conveyance [Sec.
other person [Sec 10(1)(d) of
10(1)(c) of [Sec 10(1)(e) of 10(2) of
person) [Sec 10(1) [Sec 10(1)(b) IGST Act] IGST Act]
IGST IGST Act]
(a) of of IGST Act]
Act]
IGST Act]

Place of
Location of supply
Place where Principal
goods at the Place of Location shall be
movement place
time installation where goods determined
terminates of business of
of delivery to or are taken in such
for delivery to the the third manner as
the assembly board
recipient person. may be
recipient
prescribed

Supply involves movement of goods [Section 10(1)(a) of the IGST Act, 2017]
Nature of supply Place of supply of goods
Supply involves movement of goods whether by Location of the goods at the time at which the movement
supplier or recipient or by any other person: of goods terminates for delivery to the recipient.

Example 4
Mr. C of Chennai received purchase order from Mr. H of Hyderabad for want of commercial goods. Now supply
involves movement of goods by supplier from Chennai to Hyderabad in a truck by road.

P.O.

Mr. C Mr. H
Chennai Hyderabad

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Place of supply of goods = Hyderabad.

IGST will be levied.
Declare outward supply of goods in Table 5 of GSTR-1, supplier should indicate place of supply where
location of supplier and recipient are different.

Illustration 3
R Limited of Rajasthan sells 100 cell phones to Shah Traders in Tamil Nadu. R Limited delivers the product to
Shah Traders in its warehouse in Chennai.
Find the place of supply and levy of GST?

Solution:
Place of supply = Chennai (i.e. Tamil Nadu)
IGST will be levied.
Supply of goods from non-taxable territory to another place in the non-taxable territory without such
goods entering into India:

The supplier delivers goods to a recipient or any other person on the direction of a third person by way of transfer
of documents of title to the goods or otherwise Section 10(1)(b) of the IGST Act, 2017:

Nature of supply Place of supply of goods

Goods are delivered by the supplier to a recipient or It shall be deemed that the said third person has
any other person on the direction of a third person, received the goods and the Place of Supply of such
whether acting as an agent or otherwise, before or goods shall be the principal place of business of such
during movement of goods by way of transfer of person.
documents of title to the goods or otherwise.

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Example 5
Mr. C of Chennai received purchase order from Mr. H of Hyderabad for want of commercial goods. Now supply
involves movement of goods by supplier from Chennai to Hyderabad by road in a truck.
Upon the direction of Mr. H of Hyderabad these goods are redirect to Branch office of Mr. H located in Vijayawada
by way of transfer of documents of title to the goods (i.e. Lorry Receipt or LR copy).

P.O.

Mr. C Mr. H Mr. H

Chennai Branch Office Hyderabad
Vijaywada Head Office

Place of supply of goods = Hyderabad. IGST will be levied

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.

Example 6
Supplier delivers goods to a Principal on the direction of an Agent.

P.O.

Mr. M direct to Mr. C

to deliver the goods to
Mr. H of Hydrebad
Mr. C Mr. H Mr. H
Chennai Branch Office Hyderabad
Vijaywada Head Office

Place of supply of goods = Hyderabad. IGST will be levied

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 as per Sec 10(1)(b) of IGST Act, 2017, even if Mr. M acts as
agent of Mr. H (namely Principal).

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Bill to Ship to Model:

Example 7

Illustration 4
Maruti Traders, a dealer in furniture, located in Maharashtra, receives an order from Bhagavan Traders, also
located in Maharashtra. The order is for the supply of 250 Tables, with an instruction to ship the Tables to Bhakta
Hardware’s, located in Tamil Nadu. Bhakta Hardware’s is a customer of Bhagavan Traders.
Find the place of supply and levy of GST in the hands of Maruti Traders as well as Bhagavan Traders?

Solution:
There are two parts to this transaction:
● First part of the transaction – between Maruti Traders (Maharashtra) and Bhagavan Traders (Maharashtra):
Maruti Traders is the supplier of Tables, and Bhagavan Traders is the buyer. Accordingly, Maruti Traders
bills the transaction to Bhagavan Traders, and as per the instruction, ships the goods to Bhakta Hardware’s
in Tamil Nadu.
● The second part of the transaction – between Bhagavan Traders and Bhakta Hardware’s; Bhagavan
Traders is the supplier, and Bhakta Hardware’s is the buyer. Bhagavan Traders bills the transaction to Bhakta
Hardware’s and endorses the lorry receipt (goods shipped in a lorry by Maruti Traders) in favour of Bhakta
Hardware’s. This lorry receipt (LR) will enable Bhakta Hardware’s to take the delivery of the goods.
Over here, on the instruction from Bhagavan Traders, Maruti Traders ships the tables to Bhakta Hardware’s
located in Tamil Nadu.
Here, Bhagavan Traders is deemed as the third person. Therefore, the place of supply will be the principal
place of business of the third person, i.e., Maharashtra. Accordingly, Maruti Traders charges CGST and
SGST on billing to Bhagavan Traders. The second part of the transaction between Bhagavan Traders and
Bhakta Hardware’s will be interstate, and IGST will be charged.

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Illustration 5
Whether E-commerce operator (ECO) like FILPKART, AMAZON, SNAPDEAL is to be considered as agent
of the manufacture/trader & provisions of section 10(1)(b) of IGST Act, 2017 as applicable to Bill to – Ship to
transactions shall apply?

Solution:
Sec. 2(45) of CGST Act, defines the term “electronic commerce operator” as any person who owns, operates or
manages digital or electronic facility or platform for electronic commerce;
Sec. 2(44) of CGST Act, defines the term “Electronic commerce” as means the supply of goods or services or
both, including digital products over digital or electronic network.
The ECO cannot be considered to acting as agent or otherwise as required by section 10(1)(b) of IGST Act, 2017.
ECO is an independent service provider and earning commission for the services rendered by it and its primary
responsibility is collect TCS @ 1% under section 52(1) of CGST Act, 2017, on the net value of taxable supplies
made through it by other suppliers where the consideration with respect to such supplies is to be collected
by the operator.
From the above it is evident that the ECO is not working in the capacity of agent or otherwise. It is only
providing the online marketplace services and earning subscription fees or commission on the sale value from
the listed sellers.
So the provisions of section 10(1)(b) of IGST Act, i.e. bill to – ship to provisions are not applicable to ECO.

Illustration 6
Mr. Rafi of Chennai, Tamil Nadu orders a headphone from Amazon to be delivered to his father in Kanigiri (AP)
as a gift. M/s C India Pvt. Ltd., (online seller registered in Hyderabad) processes the order and sends the headphone
accordingly and Mr. R is billed by Amazon.
Find the place of supply and levy of GST. Who is liable to pay GST?

Solution:
Place of supply = Chennai (i.e. location of buyer) as per Section 10(1)(b) of the IGST Act, 2017.
IGST is liable to pay by M/s C India Pvt. Ltd. (Hyderabad).

Illustration 7
M/s H Ltd., holding company incorporated in Hyderabad, Telangana for facilitating the sale of finished product
of another Company M/s S Ltd. subsidiary of H Ltd. M/s S Ltd incorporated in Chennai.
Sale Agreement provides that H Ltd. will be responsible for evacuation of 100% products and by-products of S
Ltd., for a marketing commission @ 5% on net sales value. S Ltd., will pack the material in standard bags as per
the industry norms and will also get the bags printed as “Marketed by H Ltd.” along with H Ltd logo & with other
printing such as “Manufactured by S Ltd.” along with S Ltd., logo.
M/s S Ltd is directly supplying the goods to the ultimate customers who are located in the State of Tamil Nadu
on behalf of M/s H Ltd.
Whether the aforesaid agreement will attract taxability & modality of invoicing will attract the scope of
section 10(1)(b) of IGST Act, 2017 (i.e. bill to and ship model as goods are moving to customer as per directions
for H Ltd.)?

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Solution:
The provision under section 10(1)(b) of the IGST Act, 2017 has been made to avoid two times movement of
goods, first from S Ltd., to H Ltd., and then second time from H Ltd., to the ultimate customer.
The given scenario is covered under bill to ship model.
M/s S Ltd., and M/s H Ltd., are registered in different States, then IGST will be payable by M/s S Ltd., while
directly supplying the goods to ultimate customer who may be located within the same State as that of M/s S Ltd.
M/s S Ltd. will issue bill in the name of M/s H Ltd., and goods ship to customers.
M/s H Ltd., will issue bill in the name of individual customers, then IGST will be payable by M/s H Ltd.
Summary:
Place of Supply of ‘Goods’ for S Ltd. Sec. 10(1)(b) = Hyderabad

Place of Supply of ‘Goods’ for H Ltd. Sec. 10(1)(a) = Tamil Nadu

Illustration 8
Chandana Traders in Karnataka receives an order from M/s A Inc. in USA to deliver 100 cell phones at Odiar

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Dealers in Karnataka. On application of section 10(1)(b) place of supply will be USA. The question arises will this
transaction be taxed even if the place of supply is USA?

Solution:
There will be two parts to this transaction as well:
(a) Between Chandana Traders of Karnataka and M/s A Inc. of USA.
(b) Between M/s A Inc. of USA and Odiar Dealers in Karnataka.
(a) Between Chandana Traders of Karnataka and M/s A Inc. of USA:
Transaction between Chandana Traders of Karnataka and M/s A Inc. of USA will be considered as Export?
As per section 16 of the IGST Act, 2017, export of goods is a “Zero Rated Supply” and tax need not be levied
on the same.
As per section 2(5) of the IGST Act, 2017, “export of goods” means taking goods out of India to a place
outside India. In our case, as goods are not moving out of India hence it cannot be termed as exports.
Section 7(5)(a) of the IGST Act, 2017 states that supply of goods or services or both when the supplier is
located in India and the place of supply is outside India shall be treated to be a supply of goods or services
or both in the course of inter-state trade or commerce.
Above section applies to the present case, supplier (Chandana Traders) is located in India and place of supply
(USA) is outside India as per Sec. 10(1)(b) of the IGST Act, 2017. Hence, the transaction between Chandana
Traders of Karnataka and M/s A Inc. of USA will be considered as an inter-state supply, and IGST shall be
levied on it.
(b) Between M/s A Inc. of USA and Odiar Dealers in Karnataka:
According to Section 2(10) of the IGST Act, 2017 “import of goods” means bringing goods into India from
a place outside India. The transaction between M/s A Inc. of USA and Odiar Dealers in Karnataka cannot be
considered as the import of goods.
This transaction will be covered under section 7(5)(c) which states that supply of goods or services or both
in the taxable territory, not being an intra-state supply and not covered elsewhere in section 7 shall be treated
to be a supply of goods or services or both in the course of inter-state trade or commerce.
In the present case, the supply of goods is in the taxable territory (Karnataka), it is not an intra-state supply
as a supplier (M/s A Inc. of USA) is located outside the taxable territory and such a situation is not covered
elsewhere in section 7. Hence, transaction between M/s A Inc. of USA and Odiar Dealers in Karnataka is also
an Inter-state transaction and IGST will have to be paid by Odiar Dealers under reverse charge mechanism
(Section 5(4) of the IGST Act, 2017). However, section 5(4) of IGST is not applicable except in case of
construction service.
Supply does not involve movement of goods [Section 10(1)(c) of the IGST Act, 2017]
Nature of supply Place of supply of goods
Where the supply does not involve movement of Location of such goods at the time of the delivery to
goods, whether by the supplier or the recipient. the recipient
(This place of supply is irrespective of the location of
the buyer and seller)

Illustration 9
A and B both located in Kerala. B comes to shop of A. A delivered goods to B. What is the place of supply of
goods. Which levy will attract?

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Solution:
Place of supply goods = Kerala.
CGST& SGST will be levied
Location of such goods at the time of the delivery to the recipient.
This is irrespective of the location of the buyer and seller.

Illustration 10
M/s Karina Ltd. incorporated in Mumbai and own a godown in Chennai. Mr. M of Mumbai approached M/s
Karina Ltd. of Mumbai for purchase of goods lying in godown at Chennai. Mr M further informs that he does not
want delivery of goods in Mumbai. M/s Karina Ltd. issues invoice for sale of goods in Mumbai.
Find the place of supply of goods and levy of tax?

Solution:

P.O.

Mr. M direct to M/[Link]

to deliver the goods at
Chennai
M/s Karina Mr. M
Mumbai Mumbai
M/s Karina
Mr. M
Godown
Chennai
Chennai

Place of supply goods = Chennai

IGST will be levied
Location of such goods at the time of the delivery to the recipient where Supply does not involve movement
of goods.
This place of supply is irrespective of the location of the buyer and seller.

Illustration 11
M/s X Ltd has place of business in Chennai, being an NBFC given an asset under financial lease to M/s ABC
Ltd. of Chennai. The said asset so far used by M/s ABC Ltd in their factory located at Hyderabad. At the end of
lease period the said asset acquired by M/s ABC Ltd. at a nominal amount. Find the place of supply of goods and
levy of GST.

Solution:
Place of supply of goods = Hyderabad.
IGST will be levied.
Since, there is no movement of goods from one place to another, provisions of section 10(1)(c) of IGST applicable.

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Example 8
Supply from the supplier of goods (Rani) to the person to whom the goods are delivered (Raja) on the instruction
of a third person (Ram). In the given case there are two supplies:
1. Rani supplied goods to Raja on the instruction of Ram (Sec. 10(1)(b).
2. Ram supplied goods to Raja without movement of goods (Sec. 10(1)(a).
Step 1: Place of supply shall be the principal place of business of the person on whose instruction goods are
delivered to the receiver of goods Sec. 10(1)(b):

Location of Principal place

Place of delivery Type of tax
of Ram who Place of supply
Case Supplier – of goods – Office payable by
instructed for Rani
Rani of Raja Rani
delivery to Raja
1 Chennai Chennai Vijayawada Vijayawada IGST
2 Chennai Hyderabad Delhi Delhi IGST
3 Chennai Cochin Kashmir Kashmir IGST
4 Chennai Cochin Chennai Chennai CGST & SGST
Step 2: Deemed supply of goods by the person on whose instruction (Ram) the goods were delivered by the
original supplier (Rani) to the receiver of goods (Raja) – Place of supply shall be the location of the goods at the
time of delivery to the recipient Sec. 10(1)(a):

Location of Principal place

Place of delivery Type of tax
of Ram who Place of supply
Case Supplier – of goods – Office payable by
instructed for Ram
Rani of Raja Ram
delivery to Raja
1 Chennai Chennai Vijayawada Chennai IGST
2 Chennai Hyderabad Delhi Hyderabad IGST
3 Chennai Cochin Kashmir Cochin IGST
4 Chennai Cochin Chennai Cochin IGST
W.e.f. 1st October 2023, Insertion of new clause (ca) to Section 10(1) of the IGST Act, 2017 [Place of supply of
goods made to a person other than a registered person]:
The place of supply of goods made to an unregistered person, [notwithstanding anything contrary contained in
the provisions of clause (a) and (c) of section 10(1)] shall be,-
√ the location as per the address of the said person recorded in the invoice issued in respect of the said supply
and,
√ the location of the supplier where the address of the said person is not recorded in the invoice.
[Explanation:.—For the purposes of this clause, recording of the name of the State of the said person in the
invoice shall be deemed to be the recording of the address of the said person.]
CBIC Circular No.209/3/2024-GST dated 26th June 2024 [sec 10(1)(ca)]:
Vide this Circular, clarification has been issued to address and resolve the ambiguity regarding the place of supply
in cases where the billing and delivery addresses of goods supplied to unregistered persons differ, particularly in
e-commerce transactions.

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Clarification:- When goods are supplied to an unregistered person and the billing address differs from the delivery
address, the place of supply is the location as per the delivery address recorded in the invoice. Also, Suppliers
should record the delivery address as the recipient’s address on the invoice when the billing and delivery addresses
differ.
Example 1: This implies that when an unregistered person from State ‘X’ places an order for supply of goods and
directs delivery to a different address in State ‘Y’, the place of supply will be State ‘Y’, i.e. the place of delivery.
Example 2: Place of Supply for Goods Delivered to an Unregistered Person
Scenario
1. Buyer (Unregistered Person): Ms. Priya from Mumbai, Maharashtra (Billing Address).
2. Delivery Address: Her friend’s address in Bengaluru, Karnataka (Delivery Address).
3. Seller: XYZ E-commerce Pvt. Ltd., registered in Chennai, Tamil Nadu.
4. Transaction:
• Ms. Priya places an online order for a smartphone with XYZ E-commerce Pvt. Ltd.
• She requests delivery to her friend’s address in Bengaluru, Karnataka.
Clarification on Place of Supply
1. Place of Supply:
• The billing address is in Maharashtra, but the delivery address is in Karnataka.
• As per the GST law, when the billing and delivery addresses differ, the place of supply is determined by
the delivery address.
• Place of Supply = Karnataka (Delivery Address).
2. GST Implications:
• The supplier (XYZ E-commerce) is registered in Tamil Nadu.
• Since the supplier’s location (Tamil Nadu) and the place of supply (Karnataka) are in different states, the
supply is treated as an inter-state supply.
• XYZ E-commerce must charge Integrated GST (IGST) on this transaction.
3. Invoice Details:
• Billing Address: Mumbai, Maharashtra (Ms. Priya).
• Delivery Address: Bengaluru, Karnataka (Ms. Priya’s friend’s address).
where the billing address and delivery address are different, the supplier may record the delivery address
as the address of the recipient on the invoice for the purpose of determination of place of supply of the
said supply of goods.
Goods are assembled or installed at Site [Section 10(1)(d) of IGST, 2017]
Nature of supply Place of supply of goods
Where the goods are assembled or installed at site. Place of such installation or assembly

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Illustration 12
M/s Feather Light Furnitures Pvt. Ltd. being a manufacturer in Mumbai send its personnel to Kolkata for setting
up a new office for a client whose registered office is in Delhi. The furniture is brought in dismantled form (i.e.
Fully knocked down condition) to the office at Kolkata and assembled at the client’s place. Here, the place of
supply will be Kolkata as it is the place of assembly/ installation.

Solution:
Place of supply of goods = Kolkata
M/s Feather Light Furnitures Pvt. Ltd. is liable to pay IGST.

Illustration 13
M/s X Ltd. Tirupathi, Andhra Pradesh agrees to supply machinery to Y Ltd. of Mumbai, which would be installed
at site in Mumbai. Find the place of supply and GST liability?
Solution:
Place of supply of goods = Mumbai
M/s X Ltd. is liable to pay IGST.

Example 22
Location of the Location of the Place of assembly or
Place of supply GST liability
supplier recipient installation at site
Delhi Haryana Punjab Punjab IGST
Andhra Pradesh Telangana Andhra Pradesh Andrha Pradesh CGST & SGST
Cochin Cochin Bengaluru Bengaluru IGST
Goods are supplied on board a conveyance [Section 10(1)(e) of IGST Act, 2017]:
Nature of supply Place of supply of goods
Where the goods are supplied on board a conveyance Location at which such goods are taken on board.
including a vessel, an aircraft, a train or a motor vehicle.

Illustration 14
Chennai express train going form Chennai to Cochin, M/s X Ltd. located in Cochin has supplied the food which
are given to passengers during night time. The food packets are loaded at Chennai Central Station, Chennai.
Find the place of supply of goods and levy of GST?
Solution:
Place of supply of goods = Chennai
M/s X Ltd. is liable to pay IGST.

Illustration 15
Mr. C of Chennai supplied goods to M/s Spice Jet Airlines of Chennai flying between Delhi-Mumbai. The goods
are loaded in the aircraft in Delhi. Find the place of supply of goods and levy of tax?

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Solution:
Place of supply of goods = Delhi
Mr. C of Chennai is liable to pay IGST.
Place of Supply of goods cannot be determined [Section 10(2) of the IGST Act, 2017]

Nature of supply Place of supply of goods

Any thing not covered under sub-section (a) to (e) of Determined in such manner as may be prescribed
Section 10(1) of the IGST Act, 2017 (i.e. as recommended by GST Council)

Place of supply of goods imported into or exported from India [Section 11 of the IGST Act, 2017]

Nature of supply Place of supply of goods

Import into India Location of the importer
Export from India Location outside India

Illustration 16
Mr. M of Mumbai imports goods from Mr. G of Germany.
Find the place of supply and levy of GST?

Solution:
Place of supply = Mumbai (i.e. location of importer)

Illustration 17
Mr. C of Chennai exports goods to Mr. A Inc. of USA.

Solution:
Place of supply = USA
It is notified that, with effect from 1st October 2023, the supply of online money gaming as the supply of goods
on import of which, integrated tax shall be levied and collected under sub-section (1) of section 5 of the IGST
Act,2017 and not under the provisions of section 3 of the Customs Tariff Act, 1975 [Notification No 3/2023-IT dt
29-09-2023 w.e.f 01.10.2023].
This implies that import of specified actionable claim of online money gaming will be taxed under IGST as
import of goods without applicability of customs duty.
As per section 24 (xia) w.e.f. 1st October 2023, Every person supplying online money gaming from a place
outside India to a person in India is required to register compulsorily irrespective of aggregate turnover.

Intra-State supply of Goods [Section 8 of the IGST Act, 2017]:

Section 8(1) of the IGST Act, 2017 reads as follows: Subject to the provisions of section 10 of the IGST Act,
2017, supply of goods where the location of the supplier and the place of supply of goods are in the same State or
same Union territory shall be treated as intra-State supply:
Provided that the following supply of goods shall not be treated as intra-State supply, namely:––
(i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit;
(ii) goods imported into the territory of India till they cross the customs frontiers of India; or

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(iii) supplies made to a tourist referred to in section 15.

As per explanation to section 15 of the IGST Act, 2017 Tourist means a person not normally resident in India,
who enters India for a stay of not more than 6 months for legitimate non-immigrant purposes.
Section 8(2) of the IGST Act, 2017 reads as follows: Subject to the provisions of section 12 of IGST Act, 2017,
supply of services where the location of the supplier and the place of supply of services are in the same State or
same Union territory shall be treated as intra-State supply:
Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic
Zone developer or a Special Economic Zone unit.
Explanation 1. — For the purposes of this Act, where a person has,––
(i) an establishment in India and any other establishment outside India;
(ii) an establishment in a State or Union territory and any other establishment outside that State or Union
territory; or
(iii) an establishment in a State or Union territory and any other establishment being a business vertical
registered within that State or Union territory,
then such establishments shall be treated as establishments of distinct persons.
Explanation 2. — A person carrying on a business through a branch or an agency or a representational office in
any territory shall be treated as having an establishment in that territory.
Illustration 18
M/s Rajini & Sons is registered in the State of Kerala and is a supplier of repair and maintenance services of
generator. The foregoing firm has supplied repair and maintenance services to M/s Sha Ltd., which is a SEZ unit in
Kerala. The aforesaid supply shall be an inter-State supply and shall be subject to IGST even though both the units
are located in the State of Kerala.
Solution:
Supply of services by a SEZ unit to the recipient of service shall be treated to be a supply of service in the course
of inter-State trade or commerce even if both are located in the same State.
It is important to note Section 16 of the IGST Act, supplies to SEZ unit is treated as zero rated supply.
Conclusion: IGST – Levy
IGST – Levy on supply of goods:
Supply of goods in the course of inter-State trade or commerce means any supply where:
~ the location of the supplier

and
~ the place of supply is in different States

Deemed Inter State Supply:

~ A supply of goods and/or services in the course of import
~ An export of goods and/or services

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The Place of Supply of Services where location of supplier and recipient is in India [Section 12 of IGST
Act, 2017]
To know the Place of Supply for Services the following two concepts are very important (Section 12(1) of the
IGST Act, 2017):
1. Location of the recipient of services.
2. Location of the supplier of services

Location of the recipient of services:

Section 2(14) of IGST Act, the definition of location of recipient of service divided into 4 sub clauses:

Recipient of service Location of the recipient of service

(a) Services received at place of business where Location of such place of business
registration is obtained.
(b) Services received at fixed establishment Location of such fixed establishment
(c) Services received at more than one establishment The location of establishment most directly concerned
with the receipt of the supply
(d) Services received at other than above. The location of the usual place of residence of the
recipient.

Location of the Supplier of service

Section 2(15) of IGST Act, the definition of location of supplier of service divided into 4 sub clauses:
Supplier of service Location of the supplier of service
(a) Supply is made from a place of business where Location of such place of business
registration is obtained.
(b) Supply is made from a fixed establishment Location of such fixed establishment
(c) Supply is made from more than one establishment The location of establishment most directly concerned
with the provision of the supply
(d) Services supplied at other than above. The location of the usual place of residence of the
supplier.

Illustration 19
M/s X Ltd. has entered into agreement with M/s Y Ltd to maintain air conditioners. M/s. X Ltd has air conditioners
located in Telangana, Andhra Pradesh and Tamil Nadu. M/s Y Ltd. has appointed sub-contractors for the purpose of
providing the services of maintenance of air conditioners installed in Telangana, Andhra Pradesh and Tamil Nadu.
The maintenance and repair work undertaken by the sub-contractor. Who is a supplier of service in the given case.
Solution:
Supplier of service is M/s Y Ltd., even though the services are actually provided by the sub-contractors on behalf
of M/s Y Ltd.

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Place of supply of services — Default Section

It means, Section 12(2) is applicable only when Section 12(3) to Section 12(14) is not applicable.

PLACE OF SUPPLY OF SERVICES – DEFAULT

SECTION Sec. 12(2) OF IGST ACT, 2017

Transactions covered under Section 12(3)

YES to Section 12(14) of the IGST Act, 2017 NO

Place of supply of service Supply made to

will be determined as per registered person
the respective provision NO
[i.e. sec. 12(3) to (14)]

Address of the recipient

NO YES YES
on record exists

POS = LOCATION OF POS = LOCATION

THE SUPPLIER OF OF THE SERVICE
SERVICE RECIPIENT

Supply of service to a registered person [Section 12(2)(a) of IGST]

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Supply of service to an unregistered person [Section 12(2)(b)(i) of IGST (where the address on
records exists)]

Supply of service to an unregistered person [Section 12(2)(b)(ii) of IGST (where the address on records
NOT exists)]

Place of supply of service = Chennai

CGST & SGST will be levied.

Illustration 20
Lucky Singh, a resident of Noida, U.P., went to Himachal Pradesh for a family vacation via Delhi-Chandigarh-
Himachal Pradesh in his own car. After entering Chandigarh, his car broke down due to some technical issue. He
called ‘ONROARDS’ - an emergency roadside car assistance company (registered under GST in Delhi) to repair
the car. The car was repaired by the staff of ‘ONROARDS’. The value of supply amounted to `80,000 (being labour
charges `50,000 and spares `30,000). The bill was supposed to be generated online though the server, but due to
some technical issue, it was not so generated.
Determine the place of supply in the given case.

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Solution:
Place of supply = Delhi
Place of supply of services directly in relation to an immovable property [Section 12(3)(a) of IGST
Act, 2017]
Sl.
Nature of service Place of supply of service
No.
1 Architects Any services Immovable property located
ancillary to these or intended to be located
2 Interior decorator
services Section India:
3 Surveyors 12(3)(d) ● Location of Immovable
4 Engineers and other related exports or estate agents property
Outside India:
5 Any service provided by way of grant of rights to use
● Location of the recipient.
immovable property
6 for carrying out or co-ordination of construction
work

Illustration 21
Mr. X located in Chennai engaged the services of Mr. Y an Architect in Chennai. Mr. X requests him to make
design of residential complex to be constructed in Cochin, Kerala. Mr. Y provided drawing and design services in
relation to immovable property located at Cochin.
Find the place of supply of service and levy of tax?
Solution:
Place of supply of service = location or intended to be locate the property (i.e. Cochin)
IGST is liable to pay by Mr. Y
Place of supply of services by way of lodging accommodation by a [Section 12(3)(b) of IGST Act, 2017]
Sl.
Nature of service Place of supply of service
No.
1 Hotel any services Property located or intended to be
ancillary to these located in India:
2 Inn
services ● Location of Immovable property
3 Guest house Section 12(3)(d) or boat or vessel.
4 Home stay Outside India:
● Location of the recipient.
5 Club or campsite by whatever name called
and including a houseboat or any other vessel

Illustration 22
Mr. Rohit registered person in Jaipur. He went to Kolkata and stays in a Taj hotel at Kolkata. He also availed
Beauty treatment services at hotel.
Find the place of supply of service and tax liability in the hands of Taj hotel.

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Solution:
Place of supply of service = Kolkata place of supply of service is same for accommodation service by hotel as
well as Beauty treatment as it is an ancillary service to the accommodation.
CGST & SGST will be levied.

Place of supply of services by way of accommodation in any immovable property for organizing [Section
12(3)(c) of IGST Act, 2017]:

Sl.
Nature of service Place of supply of service
No.
1 Any marriage or reception or any services Property located or intended to be located
matters related thereto, ancillary to these in India:
services ● Location of Immovable property.
2 Official, social, cultural, religious or
business function including services Section 12(3)(d) Outside India:
provided in relation to such function ● Location of the recipient.
at such property

Explanation to Section 12(3)(a) to (d) of IGST:

If the immovable property or boat or vessel is located in more than one State or Union Territory, the supply
of service shall be treated as made in each of the respective States or Union Territories in proportion to value of
services separately collected or determined in terms of the contract or agreement.
If there is no such contract or agreement, the value of service between two States or Union Territories shall be
determined on reasonable basis as may be provided.

Place of supply of services in relation to [Section 12(4) of IGST Act, 2017]:

Sl. No. Nature of service Place of supply of service
1 Restaurant Location where the services are actually
performed.
2 Catering services
3 Personal grooming
4 Fitness services
5 Beauty treatment services
6 Health services including cosmetic and plastic surgery

Illustration 23
Mr. Navab a person staying at Dubai, trained for the purpose of grooming of horse in Chennai. Find the place of
supply of service?

Solution:
Place of supply of service = Chennai
As the horses are groomed in Chennai.

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Illustration 24
M/s Cut Ltd., provider of hair cutting saloon services, located in Mumbai. Mr. M.S. Dhoni came from Jharkhand
to Mumbai after appointment for haircut. The services are provided in Mumbai. Find the place of supply of service
and tax liability in the hands of M/s Cut Ltd.

Solution:
Place of supply of service = Mumbai
M/s Cut Ltd is liable to pay CGST and SGST.

Place of supply of services in relation to training and performance appraisal [Section 12(5) of IGST Act,
2017]:
Sl. No. Nature of service Place of supply of service
1 Services in relation to training and Provided to a registered person:
performance appraisal. ● Location of recipient of Service
Provided to a un-registered person:
● Location where the services are actually performed.

Illustration 25
Mr. A located at Kolkata provides training at Kolkata to employees of M/s Infosys Ltd, which is registered at
Mumbai.
Find the place of supply of service and GST liability in the following two cases?
Case 1: Infosys is registered person under GST
Case 2: Infosys is not registered person under GST

Solution:
Case 1: If Infosys Ltd is a registered person
POS will be Mumbai.
Mr. A. is liable to pay IGST.
Case 2: If Infosys Ltd is not a registered than POS will be Kolkata.
Mr. A. liable to pay CGST and SGST.

Illustration 26
R Academy registered person provides commercial training and coaching services to budding CMA’s at Chennai.
Many students (who are unregistered persons) from Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and
Kerala came and stay in Chennai for the purpose of undergoing training in the R Academy. Find the Place of supply
of service.
Solution:
Place of supply of service = Chennai
As the training is performed in Chennai.
R Academy is liable to pay CGST and SGST.

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Illustration 27
X Ltd. being a registered person located in Hyderabad hires Mr. Y who is located in Chennai for appraisal
performance of senior employees of their company. Mr. Y visits Hyderabad to evaluate the performance of the
senior employees.
(a) Find the Place of supply of service?
(b) What would be the place of supply of service if some of the selected employees and relevant papers are sent
to Chennai for evaluation where X Ltd. is un-registered person.
Solution:
(a) POS = Hyderabad (i.e. Location of recipient of Service, since, provided to a registered person)
Mr. Y is liable to pay IGST.
(b) POS = Chennai (i.e. Location where the services are actually performed, since, provided to un-registered
person)
Mr. Y is liable to pay CGST and SGST.
Illustration 28
Mr. Remo (located in Mumbai) a Choreographer, being a judge appraises the performance of the participants
in Dance + auditions. He went to Bengaluru to appraise the performance of dance show competition of various
participants.
Find the place of supply of service.
Solution:
POS = Bengaluru (i.e. where the appraisal of performance has been made, since, recipients are un-registered
persons)
Place of supply of services provided by way of admission to a [Section 12(6) of IGST Act, 2017]
Sl.
Nature of service Place of supply of service
No.
1 Cultural Services Where the event is actually
ancillary held or
2 Artistic
thereto where the park or such other
3 Sporting place is located.
4 Scientific
5 Educational
6 Entertainment event or Amusement park or any other place.

Illustration 29
Board of Control for Cricket in India located at Mumbai, sold tickets on-line for IPL match, is going to conduct
at Chepauk Stadium, Chennai. However, finally match conduct at Mumbai. Find the place of supply of service of
admission to sporting event?
Solution:
POS = Mumbai
BCCI is liable to pay CGST and SGST.

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Place of supply of services provided by way of organization of a [Section 12(7) of IGST Act, 2017]
Sl.
Nature of service Place of supply of service
No.
1 Cultural Services ancillary Provided to a registered person:
thereto or assigning ● Location of recipient of Service
2 Artistic
of sponsorship to
Provided to an un-registered person:
3 Sporting such events.
● Location where the event is actually
4 Scientific held and
5 Educational ● if the event is held outside India, the
place of supply shall be the location
6 Entertainment event including supply of of the recipient.
services in relation to a conference, fair,
exhibition, celebration or similar events
Explanation to Section 12(7)(a) & (b) of IGST:
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 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.
Illustration 30
Mr. X an event organiser, located in Chennai received an order from M/s Taxman publications, Mumbai to
conduct a book fair at Chennai. Find the Place of supply of service and GST in the following two cases:
Case 1: Taxman publications is a registered person.
Case 2: Taxman publications is a un-registered person.
Solution:
Case 1: Mumbai (i.e. location of recipient of service)
Mr. X of Chennai is liable to pay IGST.
Case 2: Chennai (i.e. location where the event is actually held)
Mr. X of Chennai is liable to pay CGST & SGST.
Illustration 31
Mr. Kapil Sharma, a Jalandhar based comedian, hosted a comedy show at Singapore on birthday occasion of
Mumbai based actor Mr. Shah Rukh Khan’s son Abram.
Solution:
POS = Mumbai (i.e. location of service recipient).
GST = IGST is liable to pay by Mr. Kapil Sharma
Illustration 32
Mr. D of Delhi being an event organizer hosted an exhibition at Mumbai to exhibit the products of exhibitor
namely, Chennai Silks, Chennai, is a registered person.
Solution:
POS = Chennai (i.e. location of service recipient)
IGST is liable to pay by Mr. D of Delhi

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Illustration 33
Mr. C of Chennai being an event organizer hosted an exhibition at Dhaka to exhibit the products of exhibitor
(namely Chennai Silks) located Chennai.

Solution:
POS = Chennai (i.e. location of service recipient)
GST = CGST and SGST is not liable to pay by Mr. C
Note: Services by an organiser to any person in respect of a business exhibition held outside India is exempted
from GST (Entry No. 52).

Illustration 34
M/s Kalyan Pvt. Ltd. is an event management company is located in Chennai. Mr. Raj located in Jaipur hires the
services of M/s Kalyan Pvt. Ltd., for organizing marriage function of his son in Taj Coromandel, Chennai. Mr. Raj
is not a registered person. Find the place of supply of service and GST liability?

Solution:
POS = Chennai
(i.e. where the event is actually held).
M/s Kalyan Pvt. Ltd. of Chennai is liable to pay CGST & SGST.

Illustration 35
The Times Group being an event organizer located at New Delhi organized Miss India 2017 beauty pageant in
India in the following Cities for M/s Femina Miss India a registered person located in Mumbai:

City No. of Days Fee in `

New Delhi 12 12 crores
Chennai 18 18 crores
Mumbai 20 20 crores
Total 50 50 crores
Find the place of supply of service if contract specifies clear details.
Find the place of supply of service if contract specifies lump sum amount of `48 crores.
Solution:
The place of supply of service if contract specifies clear details:

No. of ` in Location of Place of supply of service = where

City GST
Days crore supplier of service the respective event is held
New Delhi 12 12 New Delhi New Delhi CGST & SGST
Chennai 18 18 New Delhi Chennai IGST
Mumbai 20 20 New Delhi Mumbai IGST
Total 50 50

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The place of supply of service if contract specifies lump sum amount:

No. of `in Location of supplier Place of supply of service = where

City GST
Days crore of service the respective event is held.
New 12 11.52 New Delhi New Delhi CGST &
Delhi SGST
Chennai 18 17.28 New Delhi Chennai IGST
Mumbai 20 19.20 New Delhi Mumbai IGST
Total 50 48.00

Place of supply of services by way of Transportation of goods including by mail or courier [Section 12(8)
of IGST Act, 2017]
Sl.
Nature of service Place of supply of service
No.
1 Services by way Provided to a registered person:
of Transportation ● Location of recipient of Service.
of goods including
Provided to a un-registered person:
by mail or courier
● Location at which such goods are handed over for their transportation.
(omitted w.e.f. 1st October 2023 - Provided 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).
Section 2(52) of CGST, Goods means:
Every kind of movable property other than money and securities but includes actionable claim, growing crops,
grass and things attached to or forming part of the land which are agreed to be served before supply or under a
contract of supply.

Illustration 36
M/s Navatha a transporter registered under GST, located in Vijayawada. M/s C Ltd. of Chennai registered under
GST, received services from M/s Navatha for transport of goods from its warehouse in Vijayawada to Guntur. M/s
Navatha delivered goods at Guntur.
Find the place of supply of service and GST?
Whether your answer is different, if M/s C Ltd. of Chennai is not a registered person under GST?
Note: ITC availed by M/s Navatha.

Solution:
If the recipient is registered person:
POS = Chennai (i.e. location of recipient).
M/s Navatha of Vijayawada is liable to pay IGST.
If the recipient is not a registered person:

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POS = Vijayawada (i.e. Location at which such goods are handed over for their transportation).
M/s Navatha of Vijayawada is liable to pay CGST & SGST.

Example 2: consider Example 1 above, what state code must be mentioned by the supplier of the said service
of transportation of goods, where the transportation of goods is to a place outside India, while reporting the said
supply in FORM GSTR-1?
Answer: The supplier of service shall report place of supply of such service by selecting State code as ‘96-
Foreign Country’ from the list of codes in the dropdown menu available on the portal in FORM GSTR-1.

Illustration 37
M/s DHL courier registered under GST and located in Mumbai, provided transportation of documents like
Cheques, promissory notes, pay orders (which cannot be considered as goods) belonging to Mr. C of Chennai,
from Mumbai to Chennai.

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Find the place of supply of services in the following independent cases:

(a) Mr. C of Chennai is a registered person under GST.
(b) Mr. C of Chennai is an un-registered person under GST, however his address is available in the books of M/s
DHL.
(c) Mr. C of Chennai is an un-registered person under GST, however his address is not available in the books of
M/s DHL.
Solution:
Place of supply of services is as per section 12(2) but not under section 12(8) of IGST.
(a) POS = Chennai (i.e. location of recipient of service)
(b) POS = Chennai (i.e. location of recipient of service)
(c) POS = Mumbai (i.e. location of supplier of service)
Note: Cheques, promissory notes, pay orders cannot be considered as goods.
Place of Supply of passenger transportation service to [Section 12(9) of IGST]
Sl. No. Nature of service Place of supply of service
1 Passenger transportation service. Provided to a registered person:
Including: ● Location of recipient of Service.
Rail, Mono Rail, Metro Rail, Road, Provided to a un-registered person:
Air, Vessel, boat, Cycle rickshaw, ● Place where the passenger embarks on the continuous
Bullock cart, Camel etc. journey.
Sl. No. Nature of service Place of supply of service [refer to Section 12(2) of IGST]
2 Right to passage is given for future Provided to a registered person:
use and point of embarkation is not ● Location of recipient of Service.
known at the time of issue of such Provided to a un-registered person:
right ● Location of recipient when address on record is available.
● Location of supplier in other cases
Section 2(3) of IGST Act, 2017 defines Continuous journey:
Means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single
supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves
no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.
Explanation: For the purpose of this clause, the term ‘stopover’ means a place where a passenger can disembark
either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later
point of time.
Illustration 38
Mr. Ram working in Infosys Company having office in Bengaluru is registered under GST. Mr. Ram purchased
the ticket from Hyderabad for transportation passenger by Air from Hyderabad to Chennai. Mr. Ram discloses the
name of the organization and its registration number and the place where the organization is registered. Supplier
of service is located at Hyderabad.
Find the following
(a) Place of supply of service and GST liability?
(b) Whether your answer is different if Mr. Ram is not disclosed the name of the organization and its registration
number?

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Solution:
(a) POS = Bengaluru (i.e. location of recipient of service)
GST = IGST is liable to pay by Air Travel Operator
(b) POS = Hyderabad (i.e. Place where the passenger embarks on the continuous journey)
GST = CGST & SGST is liable to pay by Air Travel Operator

Illustration 39
Jet Air registered under GST and located in Mumbai operates flight from Delhi-Dubai-London-Dubai-Delhi.
Mr. Rafi who is unregistered person, purchase air ticket for Delhi-London. Two tickets are issued to him showing
Delhi-Dubai with a halt at Dubai for 5 hours and Dubai-London.
Find the Place of supply of service and GST liability?
Solution:
POS = Delhi (i.e. place of embark)
GST = Jet Air is liable to pay IGST for the entire value of air fare.
Note: since, it is continuous journey, place of embarking of passenger who is unregistered person is relevant.

Illustration 40
Jet Airways registered under GST and located in Mumbai operates flight from Mumbai-Delhi-Mumbai. Mr.
Rafi who is unregistered person, purchase air ticket for Mumbai-Delhi-Mumbai. Only one ticket is issued to him
showing both the route.
Find the Place of supply of service and GST liability?
Solution:
POS = Mumbai (i.e. Mumbai-Delhi, place of embark is relevant)
GST = Jet Airways is liable to pay CGST & SGST.
POS = Delhi (i.e. Delhi-Mumbai, place of embark is relevant)
GST = Jet Airways is liable to pay IGST.
Note:
(i) As per explanation, Mumbai-Delhi and Delhi-Mumbai journey will be considered two separate journeys.
(ii) If there is stopover during the journey, the journey will not be considered as continuous journey.

Place of Supply of service on board a conveyance [Section 12(10) of IGST]:

Sl. No. Nature of service Place of supply of service
1 Vessel Location of the first scheduled point of departure of that conveyance for
2 Air craft the journey.
3 Train
4 Motor vehicle.

Illustration 41
A movie on demand is provided as on board entertainment during the Delhi-Chennai leg of a Dubai-Delhi-
Chennai flight.

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Find the place of supply of service?

Solution:
POS = Dubai (outside the taxable territory, hence not liable to GST).
Place of supply of telecommunication services [Section 12(11) of IGST]

Sl. No. Nature of service Place of supply of service

1 including
● data transfer, broadcasting,
● cable and
● direct to home television services.

POS for Telecommunication Services

Pre-paid sold
Fixed Line Post Paid Pre Paid
through internet

Location where Billing Location where the Billing

the line is installed Address prepaid voucher is sold Address

Where the address of the recipient as per the records of the supplier of services is not available, the place
of supply shall be location of the supplier of service.

Illustration 42
M/s Air Call registered under GST and located in Chennai. M/s Air Call has appointed Mr. C as a selling agent
for supplying pre-payment voucher to the subscriber. Find the Place of supply of service and GST liability?

Solution:
POS = Chennai (i.e. Address of the selling agent on the record of M/s Air Call).
GST = CGST & SGST is liable to pay by M/s Air Call.

Place of Supply of banking and NBFC service including Stock broking services [Section 12(12) of IGST]

Sl.
Nature of service Place of supply of service
No.
1 Banking and NBFC service ● Location of recipient of Service on the records of the supplier
including Stock broking services of service.
Otherwise:
● Location of supplier of service.

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Illustration 43
Mr. Harsha being a registered stock broker at BSE, located in Mumbai. He has clients in Chennai, Kolkata,
Bengaluru. He purchases and sells shares of clients located in Chennai, Kolkata, Bengaluru. Find the place of
supply of service and GST liability?
Solution:
POS = Chennai, Kolkata & Bengaluru.
GST = IGST is liable to pay by Mr. Harsha.
Place of supply of insurance services [Section 12(13) of IGST]

Sl.
Nature of service Place of supply of service
No.
1 Insurance services To a registered person
● Location of recipient of Service.
To a person other than registered person
● Location of the recipient of services on the records of the supplier of service.

Illustration 44
M/s X Ltd. has factory in Cochin, Chennai, Vijayawada and Hyderabad and office in Bengaluru. M/s X Ltd
obtains insurance for the assets located in Cochin, Chennai, Vijayawada, Hyderabad and Bengaluru from insurance
company located at Delhi. Premium receipt issued by the insurance company to the Bengaluru office.
Find the place of supply of service and GST liability?
Solution:
POS = Bengaluru
GST = IGST is liable to pay by the insurance company.
Place of supply of advertisement services to specified persons [Section 12(14) of IGST Act, 2017]

Sl. No. Nature of service Place of supply of service

1 Advertisement services to Located in each of such states and
● Central Government the value of such supplies specific to each state shall be in proportion
● State Government to amount attributable to service provided by way of dissemination
● Statutory Body in the respective states.
● Local Authority

Illustration 45
The Government has hired 200 hoardings in Lakshadweep and 175 hoardings in Chennai for providing
advertisement of Gas subsidy and contract contains the consideration for these hoardings separately. Hoarding
services supplied by M/s X Ltd. located in Hyderabad.
Find the place of supply of service and GST
Solution:
POS = Lakshadweep & Chennai
GST = IGST is liable to pay by M/s X Ltd.

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w.e.f. 1st January 2019, Integrated Goods and Services Tax (Amendment) Rules, 2018
Central Government vide N. No. 04/2018-Integrated Tax, dated 31st December, 2018 notified the following
rules as Integrated Goods and Services Tax (Amendment) Rules, 2018:—
As per CBIC Circular No. 203/15/2023-GST dt. 27th October 2023: Place of supply in case of supply of services
in respect of advertising sector clarification is as follows:

Sl.
Issue Clarification
No.
1 Advertising companies are often involved 1.1 It is clarified that the place of supply in the
in procuring space on hoardings/ bill case supply of services in respect of advertising
boards erected and mounted on buildings/ sector, in the cases referred in (i) and (ii), shall be
land, in different States, from various suppliers determined as below:
(“vendors”) for providing advertisement 1.2 Place of supply in Case (i):
services to its corporate clients. There may
be variety of arrangements between The hoarding/structure erected on the land should
the advertising company and its vendors as be considered as immovable structure or fixture
below: as it has been embedded in earth. Further,
(i) There may be a case wherein there is supply place of supply of any service provided by way of
(sale) of space or supply (sale) of rights supply (sale) of space on an immovable property
to use the space on the hoarding/ structure or grant of rights to use an immovable property
(immovable property) belonging to shall be governed by the provisions of section
vendor to the client/advertising company 12(3)(a) of IGST Act. As per section 12(3)(a)
for display of their advertisement on the of IGST Act, the place of supply of services directly
said hoarding/ structure. What will be the in relation to an immovable property, including
place of supply of services provided by services provided by architects, interior decorators,
the vendor to the advertising company surveyors, engineers and other related experts or
in such case? estate agents, any service provided by way of grant
(ii) There may be another case where the of rights to use immovable property or for carrying
advertising company wants to display its out or co-ordination of construction work shall be
advertisement on hoardings/bill boards at a the location at which the immovable property is
specific location availing the services of a located. Therefore, the place of supply of service
vendor. The responsibility of arranging the provided by way of supply of sale of space on
hoardings/ bill boards lies with the vendor hoarding/ structure for advertising or for grant of
who may himself own such structure or rights to use the hoarding/ structure for advertising
may be taking it on rent or rights to use in this case would be the location where such
basis from another person. The vendor is hoarding/ structure is located.
responsible for display of the advertisement 1.3 Place of supply in Case (ii):
of the advertisement company at the said
In this case, as the service is being provided by
location. During this entire time of display
the vendor to the advertising company and there
of the advertisement, the vendor is in
is no supply (sale) of space/supply (sale) of rights
possession of the hoarding/structure at the
to use the space on hoarding/structure (immovable
said location on which advertisement is
property) by the vendor to the advertising company for
displayed and the advertising company is
display of their advertisement on the said display
not occupying the space or the structure.
board/structure, the said service does not amount
In this case, what will be the place of
to sale of advertising space or supply by way of
supply of such services provided by the
grant of rights to use immovable property.
vendor to the advertising company?

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Sl.
Issue Clarification
No.
Accordingly, the place of supply of the same shall not
be covered under section 12(3)(a) of IGST Act.
Vendor is in fact providing advertisement services
by providing visibility to an advertising company’s
advertisement for a specific period of time on his
structure possessed/taken on rent by him at the
specified location. Therefore, such services provided
by the Vendor to advertising companyare purely
in the nature of advertisement services in respect of
which Place of Supply shall be determined in terms
of Section 12(2) of IGST Act.

Place of supply in case of supply of the “co-location services” clarification as per CBIC Circular No. 203/15/2023-
GST dt. 27th October 2023 is as follows:
Issue: Co-location is a data center facility in which a business/company can rent space for its own servers and
other computing hardware along with various other bundled services related to Hosting and information
technology (IT) infrastructure. A business/company who avails the co-location services primarily seek security
and upkeep of its server/s, storage and network hardware; operating systems, system software and may require
to interact with the system through a web-based interface for the hosting of its websites or other applications
and operation of the servers. In this respect, various doubts have been raised as to
[Link] supply of co-location services are renting of immovable property service (as it involves renting
of space for keeping/storing company’s hardware/servers) and hence the place of supply of such services is to
be determined in terms of provision of clause (a) of sub-section (3) of Section 12 of the IGST Act which
is the location where the immovable property is located; or
[Link] the place of supply of such services is to be determined by the default place of supply
provision under sub-section (2) of section 12 of the IGST Act as the supply of service is Hosting and Information
Technology (IT) Infrastructure Provisioning services involving providing services of hosting the servers and
related hardware, security of the said hardware, air conditioning, uninterrupted power supply, fire protection
system, network connectivity, backup facility, firewall services, 24 hrs. monitoring and surveillance service for
ensuring continuous operations of the servers and related hardware, etc.
Clarifications of the CBIC:
It is clarified that the Co-location services are in the nature of “Hosting and information technology (IT)
infrastructure provisioning services”. Such services do not appear to be limited to the passive activity of
making immovable property available to a customer as the arrangement of the supply of colocation services
not only involves providing of a physical space for server/network hardware along with air conditioning,
security service, fire protection system and power supply but it also involves the supply of various services
by the supplier related to hosting and information technology infrastructure services like network connectivity,
backup facility, firewall services, and monitoring and surveillance service for ensuring continuous operations
of the servers and related hardware, etc. which are essential for the recipient business/company to interact
with the system through a web based interface relating to the hosting and operation of the servers.
In such cases, supply of colocation services cannot be considered as the services of supply of renting of
immovable property. Therefore, the place of supply of the colocation services shall not be determined by the
provisions of clause (a) of sub-section (3) of Section 12 of the IGST Act but the same shall be determined
by the default place of supply provision under sub-section (2) of Section 12 of the IGST Act i.e. location of

352 The Institute of Cost Accountants of India

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recipient of co-location service.

However, in cases where the agreement between the supplier and the recipient is restricted to providing
physical space on rent along with basic infrastructure, without components of Hosting and Information
Technology (IT) Infrastructure Provisioning services and the further responsibility of upkeep, running, monitoring
and surveillance, etc. of the servers and related hardware is of recipient of services only, then the said
supply of services shall be considered as the supply of the service of renting of immovable property.
Accordingly, the place of supply of these services shall be determined by the provisions of clause (a) of sub-
section (3) of Section 12 of the IGST Act which is the location where the immovable property is located.

IGST Rules, 2017:

A new rule 3 has been inserted in IGST Rules to provide a mechanism to compute the proportionate value of
advertisement services attributable to different States or Union territories in the absence of any contract between
the supplier of service and recipient of services.
Sl.
Advertisement services Basis of apportion
No.
1 Newspapers and publications No. of editions in each State/UT
2 Pamphlets, leaflets, diaries, No. of pamphlets or leaflets or diaries or calendars or T-Shirts distributed
calendars, T -shirts, etc. in each State/UT
3. Hoardings other than those No. of hoarding located in each State/UT
on trains.
4. Advertisements placed on Length of the track in each State/UT where the train travelled.
trains
5 Advertisements on the back No. of consumers having billing addresses in such State/UT
of utility bills of oil and gas
companies, etc.,
6 Advertisements on railway Ratio of the number of Railway Stations in each State or Union territory
tickets

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Sl.
Advertisement services Basis of apportion
No.
7. Advertisements over radio The release order issued by Govt. Agency will show the breakup of the
stations amount which is to be paid to each of these radio stations.
8. Advertisement on television On the basis of the viewership of such channel in such State/UT shall be
channels calculated in the following manner, namely:-
(i) the channel viewership figures for that channel for a State or Union
territory shall be taken from the figures published in this regard by
the Broadcast Audience Research Council;
(ii) the figures published for the last week of a given quarter shall be
used for calculating viewership for the succeeding quarter;
(iii) where such channel viewership figures relate to a region comprising
of more than one State or Union territory, the viewership figures
for a State or Union territory of that region, shall be calculated
by applying the ratio of the populations of that State or Union
territory, as determined in the latest Census, to such viewership
figures;
(iv) the ratio of the viewership figures for each State or Union territory
as so calculated, when applied to the amount payable for that
service, shall represent the portion of the value attributable to the
dissemination in that State or Union territory.
Example 12: Govt. Agency issues a release order with QR channel for
telecasting an advertisement relating to the ‘Pradhan Mantri Kaushal
Vikas Yojana’ in the month of November 2024. In the first phase, this
will be telecast in the Union territory of Delhi, States of Uttar Pradesh,
Uttarakhand, Bihar and Jharkhand.
Let us assume it is 1,00,000 for Delhi and 2,00,000 for the region
comprising of Uttar Pradesh and Uttarakhand and 1,00,000 for the
region comprising of Bihar and Jharkhand.
QR will ascertain the viewership figures for their channel in the last week
of September 2024 from the Broadcast Audience Research Council.
Let us assume that the ratio of the populations of Uttar Pradesh and
Uttarakhand works out to 9:1. When this ratio is applied to the viewership
figures of 2,00,000 for this region, the viewership figures for Uttar
Pradesh and Uttarakhand work out to 1,80,000 and 20,000 respectively.
Let us assume that the ratio of populations is 4:1 and when this is applied
to the viewership figure of 1,00,000 for this region, the viewership figure
for Bihar and Jharkhand works out to 80,000 and 20,000 respectively.
Thus, if the total amount payable to QR by Govt. Agency is `20,00,000,
the State-wise breakup is `5,00,000 (Delhi), `9,00,000 (Uttar Pradesh)
`1,00,000 (Uttarakhand), `4,00,000 (Bihar) and `1,00,000 (Jharkhand).
Separate invoices will have to be issued State-wise and Union territory-
wise by QR to Govt. Agency indicating the value pertaining to that
State or Union territory.

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 Place of Supply

Sl.
Advertisement services Basis of apportion
No.
9. Advertisements at cinema No. of cinema halls or no. of screens in a multiplex.
halls
Example 56: Govt. Agency commissions ST for an advertisement on
‘Pradhan Mantri Awas Yojana’ to be displayed in the cinema halls in
Chennai and Hyderabad. The place of supply of this service is in the
states of Tamil Nadu and Telangana. The amount actually paid to the
cinema hall or screens in a multiplex, in Tamil Nadu and Telangana as
the case may be, is the value of advertisement service in Tamil Nadu and
Telangana respectively. Separate invoices will have to be issued State-
wise and Union territory-wise by ST to Govt. Agency indicating the
value pertaining to that State.
10. Advertisements over internet, On the basis of the internet subscribers in such State or Union territory
11. Advertisements through short On the basis of the telecommunication (hereinafter referred to as
messaging service (SMS) telecom) subscribers in such State or Union territory

Illustration 46
Govt. Agency issues a release order with QR channel (located in Delhi) for telecasting an advertisement relating
to the ‘Pradhan Mantri Kaushal Vikas Yojana’ in the month of November 2024. In the first phase, this will be
telecast in the Union territory of Delhi, States of Uttar Pradesh, Uttarakhand, Bihar and Jharkhand.
Viewership figures for their channel in the last week of September 2024 from the Broadcast Audience Research
Council is as follows:
Number of viewers 1,00,000 for Delhi and 2,00,000 for the region comprising of Uttar Pradesh and Uttarakhand
and 1,00,000 for the region comprising of Bihar and Jharkhand.
The ratio of the populations of Uttar Pradesh and Uttarakhand is 9:1 & for Bihar and Jharkhand is 4:1.
Total amount payable to QR by Govt. Agency is `20,00,000.
Applicable rate of GST 18%
Find the value of supply and place of supply for each State along with CGST & SGST or IGST payable by QR
for the month of November 2024.

Solution: (value in `)
State/UT Value of supply Place of supply CGST & SGST IGST
Delhi 5,00,000 Delhi 90,000 NIL
Uttar Pradesh 9,00,000 Uttar Pradesh NIL 1,62,000
Uttarakhand 1,00,000 Uttarakhand NIL 18,000
Bihar 4,00,000 Bihar NIL 72,000
Jharkhand 1,00,000 Jharkhand NIL 18,000

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Indirect Tax Laws and Practice

1. Rule 3 in clause (h):

The words “the service shall be deemed to have been provided all over India and” inserted after the
words “in the case of advertisements over internet” to clarify that the services provided over internet is not
specific to 1 or more State or Union territory and shall be deemed to be provided all over India.
2. Insertion of Rule 4:
The place of supply in case of the supply of services attributable to different States or Union territories, under
sub section (3) of section 12 of the IGST Act, 2017 shall be:—
1. Where such immovable property or boat or vessel is located in more than one State or Union territory-
each of the respective States or Union territories and
2. In the absence of any contract or agreement between the supplier of service and recipient of services for
separately collecting or determining the value of the services in each such State or Union territory to be
determined in the following manner namely:-
(i) Services provided by way of lodging accommodation by a hotel, inn, guest house, club or
campsite, by whatever name called and services ancillary to such services:
1. Where such property is a single property located in two or more contiguous States or Union
territories or both: the supply of services shall be treated as made in each of the respective States
or Union territories, in proportion to the area of the immovable property lying in each State or
Union territory.
Example 13
There is a piece of land of area 20,000 square feet which is partly in State S1 say 12,000 square
feet and partly in State S2, 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 S2. The service shall be deemed to have been provided in the ratio of 12:8 or 3:2
(simplified) in the States S1 and S2 respectively. The value of the service shall be accordingly
apportioned between the States.
2. Cases except where such property is a single property located in two or more contiguous States
or Union territories or both: the supply of services shall be treated as made in each of the
respective States or Union territories, in proportion to the number of nights stayed in such
property.
Example 14
A hotel chain X charges a consolidt. 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 ratio 2:1 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.
(ii) All other services in relation to immovable property including services by way of accommodation
in any immovable property for organising any marriage or reception etc.: the supply of services
shall be treated as made in each of the respective States or Union territories, in proportion to the area
of the immovable property lying in each State or Union territory
(iii) services provided by way of lodging accommodation by a house boat or any other vessel and
services ancillary to such services: the supply shall be treated as made in each of the respective
States or Union territories, in proportion to the time spent by the boat or vessel in each such State or
Union territory, determined on the basis of a declaration made to the effect by the service provider.

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 Place of Supply

Example 15
A company C provides the service of 24 hours accommodation in a houseboat, which is situated
both in Kerala and Karnataka inasmuch 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.
3. Insertion of Rule 5:
The place of supply in case of supply of services attributable to different States or Union territories, under
subsection (7) of section 12 of the said Act, in the case of—
1. services provided by way of organisation of a cultural, artistic, sporting, scientific, educational or
entertainment event, including supply of services in relation to a conference, fair exhibition, celebration
or similar events; or
2. services ancillary to the organisation of any such events or assigning of sponsorship to such events,
where the services are supplied to a person other than a registered person, the event is held in India in more
than one State or Union territory and a consolidated amount is charged for supply of such services, shall
be taken as being in each of the respective States or Union territories, and in the absence of any contract or
agreement between the supplier of service and recipient of services for separately collecting or determining
the value of the services in each such State or Union territory, as the case maybe, shall be determined by
application of the generally accepted accounting principles.
Example 16
An event management company E has to organise some promotional events in States S1 and S2 for a
recipient R. 3 events are to be organised in S1 and 2 in S2. They charge a consolidt. 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.
4. Insertion of Rule 6: Supply under section 12(11) of the IGST Act
In the case of supply of services relating to a leased circuit, where the leased circuit is installed in more
than one State or Union territory and a consolidated. amount is charged for supply of such services, shall be
taken as being in each of the respective States or Union territories, and in the absence of any contract or
agreement between the supplier of service and recipient of services for separately collecting or determining
the value of the services in each such State or Union territory, as the case maybe, shall be determined in the
following manner, namely:—
1. The number of points in a circuit shall be determined in the following manner:
(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;
(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;
2. the supply of services shall be treated as made in each of the respective States or Union territories, in
proportion to the number of points lying in the State or Union territory.
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Indirect Tax Laws and Practice

Example 17
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.
Example 18
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 19
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.
5. Insertion of Rule 7
In the case of services supplied in respect of goods which are required to be made physically available by the
recipient to the supplier, or to a person acting on behalf of the supplier, or in the case of services supplied to
an individual, represented either as the recipient or a person acting on behalf of the recipient, which require
the physical presence of the recipient or the person acting on his behalf, where the location of the supplier
of services or the location of the recipient of services is outside India, and where such services are supplied
in more than one State or Union territory, shall be taken as being in each of the respective States or Union
territories, and the proportion of value attributable to each such State and Union territory in the absence of
any contract or agreement between the supplier of service and recipient of services for separately collecting
or determining the value of the services in each such State or Union territory, as the case may be, shall be
determined in the following manner, namely:-
1. in the case of services supplied on the same goods, by equally dividing the value of the service in each
of the States and Union territories where the service is performed;
2. in the case of services supplied on different goods, by taking the ratio of the invoice value of goods in
each of the States and Union territories, on which service is performed, as the ratio of the value of the
service performed in each State or Union territory;
3. in the case of services supplied to individuals, by applying the generally accepted accounting principles.
Example 20
A company C which is located in Kolkata is providing the services of testing of a dredging machine and
the testing service on the machine is carried out in Orissa and Andhra Pradesh. The place of supply is in
Orissa and Andhra Pradesh and the value of the service in Orissa and Andhra Pradesh will be ascertained by
dividing the value of the service equally between these two States.
Example 21
A company C which is located in Delhi is providing the service of servicing of two cars belonging to Mr.
X. One car is of manufacturer J and is located in Delhi and is serviced by its Delhi workshop. The other car
is of manufacturer A and is located in Gurugram and is serviced by its Gurugram workshop. The value of
service attributable to the Union Territory of Delhi and the State of Haryana respectively shall be calculated
by applying the ratio of the invoice value of car J and the invoice value of car A, to the total value of the
service.

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Example 22
A makeup artist M has to provide make up services to an actor A. A is shooting some scenes in Mumbai
and some scenes in Goa. M provides the makeup services in Mumbai and Goa. The services are provided in
Maharashtra and Goa and the value of the service in Maharashtra and Goa will be ascertained by applying
the generally accepted accounting principles.
6. Insertion of Rule 8
In case of supply of services directly in relation to an immovable property, including services supplied
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, where the location of the supplier
of services or the location of the recipient of services is outside India, and where such services are supplied
in more than one State or Union territory, in the absence of any contract or agreement between the supplier
of service and recipient of services for separately collecting or determining the value of the services in each
such State or Union territory, as the case maybe, shall be determined by applying the provisions of rule 4,
mutatis mutandis.
7. Insertion of Rule 9
In case of supply of services by way of admission to, or organisation of a cultural, artistic, sporting, scientific,
educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of
services ancillary to such admission or organisation, where the location of the supplier or the location of the
recipient is outside India, and where such services are provided in more than one State or Union territory,
in the absence of any contract or agreement between the supplier of service and recipient of services for
separately collecting or determining the value of the services in each such State or Union territory, as the
case maybe, shall be determined by applying the provisions of rule 5, mutatis mutandis”.
Place of supply of service where location of Supplier of Service or Location of Recipient of Service is
outside India [Section 13(1) of the IGST Act, 2017]
Services are grouped into—
~ Default Section 13(2): It is applicable only when sub-section (3) to (13) of section 13 are not applicable.
~ Specific Section 13(3) to 13(13)
Default [Section 13(2)]
Place of supply of services – The
default section 13(2) of IGST Act

Location of service receiver is available

NO YES
in the ordinary course of business

Location of the service provider Location of the service recipient

is the place of supply of service is the place of supply of service

GST
Service provider located will be Service provider located in
in taxable territory levied taxable territory
YES YES
NO NO
GST will not be levied

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Clarification regarding determination of place of supply in case of software/design services related

to Electronics Semi-conductor and Design Manufacturing (ESDM) industry (CBIC Circular No.
118/37/2019-GST, dated 11th October, 2019.)
In contracts where service provider is involved in a composite supply of software development and design for
integrated circuits electronically, testing of software on sample prototype hardware is often an ancillary supply,
whereas, chip design/software development is the principal supply of the service provider. The service provider is
not involved in software testing alone as a separate service. The testing of software/design is aimed at improving
the quality of software/design and is an ancillary activity. The entire activity needs to be viewed as one supply and
accordingly treated for the purposes of taxation. Artificial vivisection of the contract of a composite supply is not
provided in law. These cases are fact based and each case should be examined for the nature of supply contracted.
Therefore, it is clarified that the place of supply of software/design by supplier located in taxable territory to
service recipient located in non-taxable territory by using sample prototype hardware/test kits in a composite
supply, where such testing is an ancillary supply, is the location of the service recipient as per Section 13(2) of the
IGST Act. Provisions of Section 13(3)(a) of IGST Act do not apply separately for determining the place of supply
for ancillary supply in such cases.

Software/Design services related to Electronics Semi-conductor and Design manufacturing (ESDM)

industry:

COMPOSITE SUPPLY

A Ltd.
Indian Software Company A Inc.
USA

Indian Company RECIPENT OF SERVICE

SUPPLIER OF SERVICE

Composite Supply:
Software development and design
for integrated circuits electronically,
testing of software on sample
SOFTWARE DEVELOPMENT (i.e.
prototype hardware.
Principal Supply

POS = LOCATION OF RECIPIEN OF SERVICE [Sec. 12(2)] of the IGST Act, 2017

Clarification in respect of determination of place of supply in following cases: -

Vide CBIC Circular No. 103/22/2019 GST dated 28.06.2019

Various services are being provided by the port authorities to its clients in relation to cargo handling:

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Place of supply: As per Section 12(2) or Section 13(2) of IGST Act, 2017.
Notification No. 2/2020 IT dated 26.03.2020

W.E.F 01.04.2020, B2B maintenance, repair and overhaul services have been notified as the services for
which the place of supply shall be the place of effective use and enjoyment of a service as given under:
Description of services or circumstances Place of supply
Supply of maintenance, repair or overhaul service in The place of supply of services shall be the location of
respect of aircrafts, aircraft engines and other aircraft the recipient of service
components or parts supplied to a person for use in the
course or furtherance of business

s
ice
rv
l se
au A Inc. of USA
rh
2 ve
ro
te
af
ck
ba
g
rtin
po 1
Ex
Imported for
overhaul services

C Ltd.
Registered person in Chennai
POS = USA
Notification No. 3/2021 IT dt. 02.06.2021:
The place of supply in respect of B2B supply of maintenance, repair or overhaul service (hereinafter referred to
as MRO service) in respect of ships and other vessels, their engines and other components or parts supplied to a
person for use in the course or furtherance of business shall be the location of the recipient of service.
Example 23
ZEENA and Co., being an Indian shipping company has received MRO service in respect of a ship/vessel from a
foreign supplier namely M/s M Inc. of Mexico. Place of supply of such service is in India (i.e., location of recipient
being in India) and said service would qualify as an ‘import of service’. Thereby, GST is payable under Reverse
Charge on these services.
Place of supply services on Goods [Section 13(3)(a) of IGST]
Sl.
Nature of service Place of supply of service
No.
1 “in respect of goods that are made physically available, by the receiver to location where the services
the service provider in order to provide the service” are actually performed.
2 services provided by way of electronic means in relation to tangible goods, the actual location of goods.

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NON-TAXABLE TAXABLE TERRITORY

TAXABLE TERRITORY
TERRITORY w.e.f 8-7-2017

POS = CHENNAI POS = J&K

LOCATED AT CHENNAI LOCATED AT J&K

SONY MUSIC COMPANY (LONDON), UNDERTAKING A TOUR IN TWO INDIAN CITIES (NAMELY
MUMBAI & CHENNAI), OBTAINS THE SERVICES OF AN INDIAN CARGO HANDLING FIRM TO
MOVE ITS SOUND AND MUSICAL EQUIPMENTS BETWEEN THE TWO CITIES.
Place of supply of service shall be the location where the services are actually performed. THIS SERVICE
IS IN THE TAXABLE TERRITORY (i.e. Chennai) not withstanding the location of the service receiver.

MUSICAL INSTRUMENTS TRANSPORTED FROM MUMBAI TO CHENNAI by Air

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Spice jet company in India gets its aircraft repaired at Chennai Airport, by engineers deputed by Airbus,
France an overseas firm
POSwho travel from France to Chennai for the purpose.
= J&K

● The place of supply of this service is in the taxable territory (i.e. Chennai).
● This service is taxable in the hands of Airbus, France (i.e. non-resident taxable person)

Section 13(3)(a) of IGST Act, 2017 is not applicable:

If the following two conditions are satisfied then section 13(2) of IGST Act, 2017 is applicable:
(i) If goods are to be temporarily imported into India for repairs or for any other treatment or process and are
exported after such repairs or treatment or process
(ii) without being put to any other use in India, than that which is required for such repairs or treatment or
process.

Illustration 48
ABC Fabricators has its factory located in Gujarat. It has temporarily imported certain goods from its customer
located in China and re-exported them to China after carrying out the necessary repairs without putting them to
any use in Gujarat.
Examine what would be the place of provision of service in the given case with reference to the Place of Supply
of Services.
Will your answer be different if the repaired goods are re-exported after being put to use in Gujarat for some
time?

Solution:
In the given case, since goods have been temporarily imported by ABC Fabricators and have been re-exported
after the repairs without being put to any use in Gujarat (taxable territory), place of provision of repair services
carried out by ABC Fabricators will be determined by section 13(2) of IGST Act, 2017. Consequently, the place of
supply of service will be the location of service receiver, viz. China (non-taxable territory).
However, if repaired goods are re-exported after being put to use, the place of provision of service will be
determined according to section 13(3)(a) of IGST Act, 2017, if the use to which such goods are put to is not
required for such repair.

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Therefore, in such a case, the place of supply of service will be the location where the service is actually
performed, which in the given case is Gujarat.
However, if the use is of such nature, which is necessary for carrying out the repairs, the place of supply of
service will again be determined as per section 13(2) of IGST Act, 2017.

Clarification in respect of determination of place of supply in following cases: -

Vide CBIC Circular No. 103/22/2019 GST dated 28.06.2019

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Place of supply services on Individual [Section 13(3)(b) of IGST]

S.
Nature of service Place of supply of service
No.
1 Services supplied to an Individual, represented either as the service location where the services
receiver or a person acting on behalf of the receiver, which require are actually performed.
physical presence of the recipient or the person acting on his behalf,
with the supplier for the supply of services.

Illustration 49
Famous actress Aish went to London and avail cosmetic or plastic surgery services for her nose. Find the place
of supply of service. GST is liable to pay?

Solution:
Place of supply = London. GST is not liable to pay.

Place of supply of services supplied directly in relation to an IMMOVABLE PROPERTY [Section 13(4)
of IGST]
Nature of Service Place of Supply of Service
● Lease or a right to use, occupation enjoyment or
provision of hotel accommodation by a hotel, guest
house, club
● Construction service
● Architects
WHERE IMMOVABLE PROPERTY IS
● Interior decorators
LOCATED OR INTENDED TO BE LOCATED
● Renting of immovable property
● Real estate agents
● Auctineers, engineers and similar experts or
professional people, relating to land, buildings or
civil engineering works etc.,

Illustration 50
Mrs. Neelam Goel, an Interior Designer based in Delhi provides her service to an Indian Hotel Chain (which has
business establishment in Mumbai) for its newly acquired property in London. Find the place of supply of service
and the person liable to pay GST if any?

Solution:
As per section 12(3)(a) of IGST Act, 2017, Location of service recipient is the place of supply of service.
PoS = Mumbai. Taxable territory. Hence, attract IGST in the hands of Mrs. Neelam Goel.

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Place of supply of services supplied by way of admission to, or organization of section 13(5) of IGST
Nature of Service Place of Supply of Service
● Cultural
● Artistic
● Sporting
● Scientific
● Educational
● Entertainment event
Where event is actually held.
● Celebration
● Conference
● Fair
● Exhibition
● Similar events and
● Services ancillary to such admission or organisation

Illustration 51
Mr. Sharma a Jalandhar based comedian hosted a comedy show at Singapore with help of event organizer located
in Dubai.
POS: Singapore

Illustration 52
Mr. Kapil a Jalandhar based comedian hosted a comedy show at Singapore on birth day occasion of Mumbai
based actor Mr. Khan’s son Mr. Abu an un-registered person. Find the GST liability if any?
POS = Mumbai (i.e. location of the recipient Sec. 12(7) of IGST Act, 2017)
GST = IGST is liable to pay by Mr. Kapil.

Illustration 53
Mr. D of Delhi being an event organizer hosted an exhibition at Mumbai to exhibit the products of exhibitor
(namely M/s S Silks Ltd. of Singapore).
PPS = Mumbai
GST = IGST is liable to pay by Mr. D of Delhi.

Illustration 54
Mr. D of Dhaka being an event organizer hosted an exhibition in Mumbai to exhibit the products of exhibitor
(namely M/s S Silks Ltd. of Shimla).

Solution:
PPS = Mumbai
GST = CGST & SGST is liable to pay by Mr. D of Dhaka (non-resident taxable person).
Services referred u/s 13(3) or (4) or (5) is supplied at more than one location [Section 13(6) of IGST]

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Where any service stated in sub-section 3, 4, or 5 of section 13 is provided at more than one location, including
a location of taxable territory, its place of supply shall be the location in the taxable territory.

IN Chennai 20%
Providing technical inspection and
certification services for a newly IN Cochin 25%
developed product of M/s A Inc.
IN Colombo 55%

M/s X Ltd. M/s A Inc.

Chennai U.S.A.

Place of supply of service will be the place in the taxable territory (i.e. Chennai and Cochin).
X Ltd is liable to pay IGST for the part of Chennai
X Ltd is liable to pay IGST for the part of Cochin.
X Ltd is also liable to pay IGST for the services rendered in Colombo.
It means tax will be payable on the entire value.

Section 13(3) or (4) or (5) Services performed in more than one State [Section 13(7) of IGST]
Section 13(3) or (4) or (5) Services performed in more than one State or Union Territory, the Place of supply
of such services shall be taken as deemed in each of the State or Union Territories in proportion to the value of
services so provided.
The value of services is required to be determined in terms of the agreement or any reasonable means.

Illustration 55
Mr. Harsha, an event organiser located in Malaysia, undertakes to organize comedy shows of Mr. Bhrami of
Hyderabad and Mr. Vadivelu of Chennai in India. The comedy shows are hosted in Telangana, Andhra Pradesh,
Tamil Nadu and Pondicherry.
Gross value of contract is ` 60 crores.
State No. of Days Recipient of Service
Telangana = 20 Mr. Bhrami
Andhra Pradesh = 15 Mr. Bhrami
Tamil Nadu = 14 Mr. Vadivelu
Pondicherry = 01 Mr. Vadivelu
Total = 50
Find the place of supply of services, value of service and person liable to pay tax.

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Solution:
Place of Supply of service Value ` in crores Who is liable to pay GST GST
Telangana 24 Mr. Harsha being a non-resident taxable person. IGST
Andhra Pradesh 18 Mr. Harsha being a non-resident taxable person. IGST
Tamil Nadu 16.80 Mr. Harsha being a non-resident taxable person. IGST
Pondicherry 1.20 Mr. Harsha being a non-resident taxable person. IGST
Total 60
Specified Services [Section 13(8)]
PLACE OF SUPPLY OF SERVICES = LOCATION OF THE SERVICE PROVIDER
SPECIFIED SERVICES INCLUDES:
(a) Services provided by a banking company, or financial company, or a NBFC to account holders
(b) Intermediary services
(c) Services consisting of hiring of means of transport, other than —
(i) aircrafts, and
(ii) vessels except yachts
upto a period of one month
Services provided by a banking company or financial company or a NBFC to account holders:
Illustration 56
Mr. S has a permanent residence at Chennai. He has a savings bank account with Chennai Mound Road Branch
of State Bank of India. On Aug 1, 2021, Mr. S opened a safe deposit locker with the Chennai Mound Road Branch
of State Bank of India. Mr. S went to Singapore for official work in Sep, 2021 and has been residing there since
then. Mr. S contends that since he is a non-resident during the year 2025-26 in terms of the Income-tax Act, GST
cannot be levied on the locker fee charged by State Bank of India for the year 2025-26.
Examine the correctness of the contention of Mr. S.
Solution:
POS = Chennai
GST = CGST and SGST is liable to pay by State Bank of India Chennai Mount Road Branch.
Intermediary services includes the following:
~ Travel agent (any mode of travel)
~ Tour operator
~ Commission agent for a service (including an agent for buying or selling of goods)
~ Recovery agent etc.,

Remittances from abroad, GST will be levied.

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Intermediary:
As per Section 2(13) of the Integrated Goods and Services Tax Act, 2017 intermediary means a broker, an agent
or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both,
or securities, between two or more persons, but does not include a person who supplies such goods or services or
both securities on his own account.
As per CBIC Circular No. 159/15/2021 GST dated 02.06.2021, Scope of Intermediary is as follows:
Intermediary has been defined under section 2(13) of IGST Act, 2017, as “intermediary means a broker, an agent
or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both,
or securities, between two or more persons, but does not include a person who supplies such goods or services or
both or securities on his own account”.

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Illustration 57
Freight Forward Services:

S. Nature of Place of supply of

Service provider Remarks
No. Service service
1. Freight forwarder acts as an Transportation Intermediary service. Location of Service
agent of airline/carrier/ ocean of goods outside Section 13(8)(b) of provider is the Place of
liner India the IGST Act, 2017. supply of Service.
2. Freight forwarders act as a Transportation Transportation of
principal. of goods outside goods w.e.f. 1st
The invoice is raised by the India October 2023 place
freight forwarder on the exporter. of supply as per
He is bearing all the risks and Section 13(2) of the
liability for transportation. IGST Act, 2017.

Illustration 58
Write a brief note on the applicability of GST in the following cases.
(i) Whether the representation service provided by State Bank of India Chennai to a foreign MTSO (Money
Transfer Service Operator) in relation to money transfer to a beneficiary in India falls in the category of
intermediary service.
(ii) Whether GST is leviable on the services provided as mentioned in (i) above by an intermediary/agent located
in India (in taxable territory) to MTSO’s located outside in India.

Solution:
(i) Yes, the given service falls under intermediary service under section 13(8)(b) of the IGST Act, 2017.
(ii) Place of supply of service is location of the supplier of service (i.e. taxable territory namely Chennai) and
hence, GST is liable to pay by intermediary/agent.

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Illustration 58(a)

MSTO (namely City Bank USA) provided services to account holder:

Illustration 58(b)

State Bank India Mount Road Branch Chennai provided services to MSTO (namely City Bank USA) by crediting
beneficiary account in India by acting as intermediary:

Illustration 59

M/s Bharath International of Imphal, Manipur is an Indenting Agent. M/s MRS Inc. of Singapore, supply yarns as
per the instruction of M/s Bharath International, an Indenting Agent, to the buyers located in India and Bangladesh
also. M/s MRS Inc. of Singapore give commission to M/s Bharath International of Imphal at pre-decided rate
in percentage of sales value. M/s MRS Inc. of Singapore is foreign resident, and not having any permanent
establishment of business in India. M/s Bharath International of Imphal receive the commission from M/s MRS
Inc. of Singapore in Foreign Currency. This receipt of commission in the hands of M/s Bharath International is not
liable to any other tax.

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 Place of Supply

Answer the following:

(1) Whether M/s Bharath International of Imphal is liable to pay IGST on the amount of commission?

(2) If yes, then how the amount of IGST will be calculated say USD 1,00,000 received in the month of April
20XX? Exchange rate as per generally accepted accounting principles is `68.25. RBI exchange rate is `68.
Applicable rate of IGST @18%.

(3) Whether IGST paid on the Commission amount is eligible for the credit as RCM?

Solution:

Place of supply = Location of Supplier i.e. Imphal, Manipur (i.e. Taxable Territory) as per Section 13(8)(b) of
the IGST Act, 2017.

Location of supplier = M/s Bharath International of Imphal, Manipur

It is not export of service. Since, section 2(6) of the IGST Act, 2017 one of the conditions (i.e. Place of supply
should be outside India) is not satisfied.

In view of the above provisions answers to specific queries are provided as follows:

(a) M/s Bharath International of Imphal, Manipur is liable to pay IGST on the commission amount received by
it. [Sec 7(5)(c) of the IGST Act, 2017]

(b) IGST is `12,28,500 [i.e. (`68.25 x USD 1,00,000) x 18%].

(c) Since, M/s Bharath International, Imphal is liable to pay IGST on the commission amount received from M/s
MRS Inc. of Singapore, and M/s Bharath International, Imphal it is not paying GST on reverse charge, it is
not eligible to take credit of GST paid by it.

CBIC Circular No. 230/24/2024-GST dt. 10th September, 2024 - Clarification in respect of advertising
services provided to foreign clients.
This clarification from the Board addresses concerns raised by Indian advertising companies regarding the
classification of services provided to foreign clients. Field formations have been treating these services as supplied
within India, thereby denying export benefits. The Board, invoking Section 168(1) of the Central Goods and
Services Tax (CGST) Act, provides clarity on this matter to ensure consistent application across field formations.
In this circular – following issues has addressed.
Here’s a structured and summarized explanation of the issues, clarifications, and examples based on the scenarios
mentioned:
Case 1: Comprehensive Advertising Agreement
Scenario:
A foreign client hires an Indian advertising company for a comprehensive advertising agreement. The advertising
company provides end-to-end services, including media planning, content creation, media space procurement, and
campaign monitoring. The foreign client pays the advertising company in foreign exchange.

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Issues and Clarifications:

1. Is the advertising company an intermediary?
• Clarification: The advertising company is not an intermediary because:
• It provides the entire scope of services on its own account.
• Agreements are executed on a principal-to-principal basis.
• The media owners do not have a direct agreement with the foreign client.
• Place of Supply: Determined under Section 13(2) of the IGST Act as the location of the recipient,
which is outside India. Therefore, the service qualifies as an export of service if conditions under
Section 2(6) of the IGST Act are met.
2. Who is the recipient of services?
• Clarification: The foreign client is the recipient because:
• The foreign client is liable to pay for the services.
• Representatives in India or the target audience cannot be considered recipients under Section 2(93) of
the CGST Act.
3. Can these services be considered performance-based under Section 13(3)?
• Clarification: The services are not performance-based because:
• There is no physical presence of goods or individuals required.
• The services involve coordination and planning, which do not fall under the purview of Section 13(3).
• Place of Supply: Determined under Section 13(2) as the location of the recipient (foreign client), i.e.,
outside India.
Case 2: Facilitation Services (Acting as an Agent)
Scenario:
An Indian advertising company acts as an agent for the foreign client, arranging media space directly with the
media owner. The media owner invoices the foreign client, and the client pays the media owner directly. The
advertising company charges the foreign client only for its facilitation services.
Issues and Clarifications:
1. Is the advertising company an intermediary?
• Clarification: The advertising company is an intermediary because:
• It facilitates the service of procuring media space and broadcasting advertisements.
• It does not supply the media services on its own account.
• Place of Supply: Determined under Section 13(8)(b) of the IGST Act as the location of the supplier,
i.e., India. Consequently, these services do not qualify as exports.
2. Who is the recipient of services?
• Clarification: The foreign client remains the recipient, as they pay for the facilitation services.

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3. Can these services be considered performance-based?

• Clarification: No, these services involve facilitation and coordination rather than physical performance or
presence.
• Place of Supply: Determined under Section 13(8)(b) as the location of the supplier, i.e., India.
Examples to Illustrate the Clarifications:
Example 1: Comprehensive Agreement (Not an Intermediary)
• Facts: ABC Ltd. (India) enters into a comprehensive agreement with XYZ Inc. (USA) for planning, creating,
and displaying advertisements. ABC Ltd. procures media space and pays media owners on its own account.
ABC Ltd. invoices XYZ Inc. for the entire service and receives payment in foreign exchange.
• Outcome:
• ABC Ltd. is not an intermediary.
• Place of Supply: Outside India (location of XYZ Inc.).
• The service qualifies as an export of service under Section 2(6) of the IGST Act.
Example 2: Facilitation Services (Acting as an Intermediary)
• Facts: ABC Ltd. (India) facilitates the procurement of media space for XYZ Inc. (USA). The media owner
directly invoices XYZ Inc., and payment is made by XYZ Inc. to the media owner. ABC Ltd. charges XYZ
Inc. only for facilitation.
• Outcome:
• ABC Ltd. is an intermediary.
• Place of Supply: India (location of ABC Ltd.).
• The service does not qualify as an export.

Circular No. 220/1/2024-GST dated 26 June 2024

Clarification on the place of supply applicable for custodial services provided by banks to Foreign Portfolio
Investors (FPI):
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The circular clarifies the place of supply for custodial services provided by banks to FPIs. It states that these
services should not be considered as services provided to ‘account holders’ under section 13(8)(a) of the IGST
Act. The place of supply for such services should be determined under the default provision, which is sub-section
(2) of section 13 of the IGST Act. The circular provides details on the definition of custodial services, the types
of securities FPIs can invest in, and the main activity of banks in providing custodial services. The circular also
specifies that similar provisions were there under the service tax regime.
Custodial Services Definition and Scope: Include safekeeping of securities of clients and incidental services.
Account Holder Clarification: “Account” has been defined in the rules to mean an account which bears an interest
to the depositor. Custodial services are not considered services provided to account holders as per Section 13(8)
(a) of the IGST Act.
The place of supply for services supplied by a banking company or financial institution to account holders is the
location of the supplier.
Place of Supply Determination: Custodial services are not covered under Section 13(8)(a) of the IGST Act as they
do not qualify as services provided to ‘account holders’.
Place of supply for custodial services is determined under the default provision, Section 13(2), implying the
location of the recipient of services.
Here’s an example illustrating the application of Circular No. 220/1/2024-GST dated 26 June 2024 regarding
custodial services provided by banks to Foreign Portfolio Investors (FPIs):
Scenario:
ABC Bank Ltd., located in Mumbai, India, provides custodial services to XYZ Capital, an FPI based in Singapore.
Details of Services Provided by ABC Bank:
1. Custodial Services: Safekeeping of XYZ Capital’s securities in India (e.g., shares, debentures, and government
bonds).
2. Incidental Services: Record-keeping, settlement of securities transactions, collection of dividends/interest, and
reporting of holdings.
3. Fee Structure: ABC Bank charges a custodial fee based on the volume of securities under management.
Step-by-Step Analysis of the Place of Supply:
1. Understanding Section 13(8)(a) of the IGST Act:
Section 13(8)(a) states that for services provided by a banking company, financial institution, or NBFC to an
“account holder,” the place of supply is the location of the supplier of services (in this case, India).
• Key Point of the Circular: Custodial services are not considered services provided to an “account holder.”
• Reason: An “account” under this section is defined as an account bearing interest, such as a savings or
fixed deposit account. Custodial accounts do not bear interest.
2. Applicability of Section 13(2) – Default Rule:
Since custodial services do not qualify under Section 13(8)(a), the place of supply is determined under Section
13(2), which specifies:
• Place of supply = Location of the recipient of services, if the recipient’s location is available.

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In this case:
• The location of the recipient, XYZ Capital, is Singapore.
3. Tax Implications:
• The place of supply for custodial services is outside India (Singapore).
• As the place of supply is outside India and the supplier is in India, this transaction qualifies as an export of
services under GST.
• Therefore, ABC Bank can provide these services under a zero-rated supply and may claim refunds for
input tax credits, if any.
Numerical Illustration:
• Custodial Fee Charged by ABC Bank: ₹10,00,000
• GST Implication:
• Since this is an export of services, no GST is charged to XYZ Capital.
• ABC Bank must comply with the export documentation requirements to treat this as zero-rated.
Key Takeaways from Circular:
1. Custodial services are excluded from the ambit of Section 13(8)(a).
2. The place of supply is determined as per Section 13(2) and is based on the recipient’s location.
3. Similar treatment was provided under the service tax regime for custodial services to foreign clients.
Clarification on place of supply of data hosting services provided by service providers located in India to
cloud computing service providers located outside India (vide CBIC Circular No. 232/26/2024-GST Dt. 10th
September 2024):
Here’s a practical example illustrating the clarified position regarding data hosting services:
Issue 1: Data Hosting Service Provider and Cloud Computing Service Provider
1. Parties Involved:
• Data Hosting Service Provider (Provider): Located in India, operating a data center.
• Cloud Computing Service Provider (Recipient): Located in the USA, offering cloud-based services to its
global customers.
• End Users (Consumers): Located in various countries, accessing cloud computing services from the
Recipient.
2. Nature of Contract:
• The Recipient contracts with the Provider to host their data on the Provider’s servers.
• The Provider operates data centers equipped with computing and networking infrastructure to manage data
storage, processing, and distribution.
• The Provider does not interact with or have any knowledge about the End Users.

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3. Billing and Payments:

• The Provider charges the Recipient for data hosting services based on the usage of infrastructure (e.g.,
server space, processing power).
• Payment is made by the Recipient (located outside India) in foreign exchange.
4. Service Flow:
• The Provider provides services like server hosting, IT management, monitoring, and data security directly
to the Recipient.
• The Recipient uses these services to deliver cloud computing solutions (e.g., software, storage, analytics)
to its End Users.
Practical Example Analysis
1. Whether the Data Hosting Provider is an “Intermediary”?
• The Provider supplies hosting services directly to the Recipient on a principal-to-principal basis.
• The Provider is not facilitating the supply of cloud computing services between the Recipient and the End
Users.
• Conclusion: The Provider is not an intermediary under Section 2(13) of the IGST Act.
2. Place of Supply:
• Since the Provider is not an intermediary, the place of supply cannot be determined under Section 13(8)(b)
(location of the supplier).
• Instead:
• No goods are “made available” by the Recipient to the Provider; hence, Section 13(3)(a) does not
apply.
• The services are not directly related to immovable property, so Section 13(4) does not apply.
• The place of supply defaults to Section 13(2), which specifies the location of the recipient as the place
of supply.
• Conclusion: The place of supply is the location of the Recipient (USA).
3. Export of Services:
To qualify as an export of services under Section 2(6) of the IGST Act:
1. The Supplier of service is located in India.
2. The Recipient of service is located outside India.
3. The place of supply is outside India.
4. Payment is received in convertible foreign exchange.
5. The supplier and recipient are not merely establishments of the same entity.
Outcome:
All conditions are satisfied, and the services qualify as export of services. The Provider is eligible for GST benefits,
such as:
• Zero-rated supply under Section 16 of the IGST Act.
• Refund of input tax credit, if any, on inputs/services used for providing the exported services.

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Numerical Illustration
1. Contract Value:
• The Provider charges $50,000 (approximately ₹40,00,000) per month for hosting services.
• Payment is received in USD.
2. GST Implications:
• The service qualifies as an export of service and is zero-rated under GST.
• The Provider does not charge GST on the invoice raised to the Recipient.
3. Input Tax Credit Refund:
• The Provider incurs GST on purchases such as servers, electricity, and IT equipment.
• Total Input GST for the month: ₹2,00,000.
• Since the service is zero-rated, the Provider can claim a refund of the ₹2,00,000 input GST.
Key Takeaways
1. Place of Supply: The location of the cloud computing service provider (USA).
2. Export of Service: Hosting services qualify as export and are zero-rated.
3. Input Tax Credit: The Provider can claim a refund for input taxes incurred in providing the exported service.
Issue 2: Whether data hosting services are provided in relation to goods “made available” by the recipient (cloud
computing provider) and whether the place of supply can be determined under Section 13(3)(a) of the IGST Act.
Key Points:
1. Section 13(3)(a):
• Applies when goods are physically made available by the recipient to the provider, and the place of supply
is the location of the service provider.
2. Scenario:
• Data hosting providers operate independently, using their own premises, infrastructure (hardware, cooling,
power, software, etc.), and personnel.
• Cloud computing providers (recipients) do not own or “make available” the infrastructure used by the data
hosting provider.
3. Clarification:
• Data hosting services are not related to goods “made available” by the cloud computing providers.
• Even if some hardware is provided by the recipient, the hosting provider manages all aspects of the service
independently.
• Therefore, Section 13(3)(a) does not apply, and the place of supply cannot be determined based on this
section.
4. Outcome:
• Place of supply is determined under Section 13(2) (default rule), which is the location of the recipient
(overseas cloud computing provider).

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Issue 3: Are data hosting services directly related to immovable property, and is the place of supply determined
under Section 13(4) of the IGST Act?
Key Points:
1. Section 13(4):
• Applies when services are directly related to immovable property, and the place of supply is the location
of the property.
2. Scenario:
• Data hosting providers use premises, IT infrastructure, and additional resources to deliver hosting services.
• The services involve operating data centers, managing power supplies, ensuring network connectivity, and
maintaining servers, not just managing or maintaining immovable property.
3. Clarification:
• Data hosting services are not directly related to immovable property but are comprehensive IT services.
• Section 13(4) does not apply.
4. Place of Supply:
• Determined under Section 13(2) (default rule), which is the location of the recipient.
• If the recipient (cloud computing provider) is outside India, the place of supply is outside India, and the
service qualifies as export of services, subject to conditions in Section 2(6).
Place of provision of a service of transportation of goods other than by way of mail or courier [Section
13(9) of IGST]
Place of supply of Service = Destination of such Goods
Section 13(9) of IGST Act, 2017 omitted vide Finance Act, 2023, w.e.f. 1st October 2023. W.e.f. 1-10-2023 place
of supply will be under section 13(2) of IGST Act.
As per CBIC Circular No. 203/15/2023 dt 27-10-2023, It is clarified that after the said amendment comes into
effect, the place of supply of services of transportation of goods, other than through mail and courier, in cases
where location of supplier of services or location of recipient of services is outside India, will be determined by
the default rule under section 13(2) of the IGST Act and not as performance based services u/s 13(3) of the IGST
Act.
Place of supply in case of service of transportation of goods by mail or courier will continue to be determined by
the default rule under section 13(2) of the IGST Act, 2017.

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Place of provision of service is Bangalore.

No GST
By Air upto Customs Station exempted

M/s A M/s B Ltd.,

Cut flowers is consigned from USA
Ltd., USA Bangalore

Place of supply of
service is Chennai.
Attract GST
is
er rom
M/s X Ltd., w f
t flo ed re
Chennai u n lo
C sig ga
n n
co Ba

In case of transhipment of goods:

Illustration 60
A vessel Bhishma, sailing from U.S.A to Australia via India carries various types of capital goods namely ‘A,
B, C & D’. ‘A & B’ are destined to Mumbai Port. On account of submission of bill of transhipment product ‘A’
transhipped to Chennai port as ultimate destination in India and product ‘B’ transhipped to Srilanka.
Find the place of supply of service and person liable to pay IGST on sea freight. Import of goods on CIF basis.
Solution:
Place of supply = Chennai (i.e. product ‘A’ ultimate destination in India) under section 13(2) of IGST Act,2017.
It is exempted supply of service.
Passenger Transportation Services [Section 13(10) of IGST]
The place of supply of service = where the passenger embarks on the conveyance for a continuous journey.

NEW DELHI LONDON NEW YORK

Passengers Embarks from New Delhi.

Place of supply is New Delhi. Hence, Taxable

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Services Provided on Board Conveyances [Section 13(11) of IGST]

Any service provided on board a conveyance (aircraft, vessel, rail, or roadways bus) will be covered here.
POS = The first scheduled point of departure of that conveyance for the journey.
Online information and database access or retrieval services [Section 13(12) of IGST]
POS = Location of the recipient of service
Recipient of service deemed to be located in the taxable territory, if any two of the following conditions are
satisfied:
(a) the location of address presented by the recipient of services 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.

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Place of Supply - OIDAR

3.3
Services

O
nline information and database access or retrieval [OIDAR] services means services whose 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:
w.e.f. 1st October 2023, Section 2(17) of IGST Act, 2017 “online information and database access or retrieval
services” means services whose delivery is mediated by information technology over the internet or an electronic
network and the nature of which renders their supply impossible to ensure in the absence of information technology
and includes electronic services such as,-

OIDAR Services includes OIDAR Services excludes

(i) advertising on the internet; (i) Supplies of goods, where the order and
processing is done electronically
(ii) providing cloud services; (ii) Supplies of physical books, newsletters,
newspapers or journals
(iii) provision of e-books, movie, music, software (iii) Services of lawyers and financial consultants
and other intangibles via telecommunication who advise clients through email
networks or internet;
(iv) providing data or information, retrievable or (iv) Booking services or tickets to entertainment
otherwise, to any person, in electronic form events, hotel accommodation or car hire
through a computer network;
(v) online supplies of digital content (movies, (v) Educational or professional courses, where the
television shows, music, etc.); content is delivered by a teacher over the internet
or an electronic network (in other words, using a
remote link)
(vi) digital data storage; and (vi) Offline physical repair services of computer
equipment
(vii) w.e.f. 1st October 2023 online gaming, excluding (vii) Advertising services in newspapers, on posters
the online money gaming as defined in clause and on television
(80B) of section 2 of the Central Goods and
Services Tax Act, 2017 (12 of 2017.);
(viii) online money gaming

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Examples of services whether or not OIDAR services:

Whether Provision of Whether it is
service mediated by Automated and OIDAR
Nature of service information technology impossible to ensure in service
over the internet or an absence information
electronic network technology
Pdf document manually emailed by provider. Yes No No
Example 72
R Academy sent soft copy of work book
solutions.
Pdf document automatically emailed by Yes Yes Yes
provider’s system
Example 73
Airtel receipt for post paid connections,
acknowledgments for submission of
documents through MCA website and so on.
Pdf document automatically downloaded Yes Yes Yes
from site
Example 74
downloading software like anti-virus
software, software to block banner adverts
showing and so on.
Stock photographs available for automatic Yes Yes Yes
download
Example 75
Desktop themes, screen savers
Online course consisting of pre-recorded Yes Yes Yes
videos and downloadable pdfs.
Example 76
On account of pressing buy button pre-
recorded video classes automatically
available on screen.
Online course consisting of pre-recorded Yes No No
videos and downloadable pdfs plus support
from a live tutor.
Example 77
Recorded classes are available for those
students who miss live classes.

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 Place of Supply

Whether Provision of Whether it is

service mediated by Automated and OIDAR
Nature of service information technology impossible to ensure in service
over the internet or an absence information
electronic network technology
Individually commissioned content sent in Yes No No
digital form
Example 24
Photographs, reports, medical results.

Summary based on section 14 of IGST Act, 2017:

Type of service Nature of service (Cross-border) Taxable/Exempted Liable to pay tax
B2C OIDAR service Taxable Forward charge
B2C Other than OIDAR service Exempt Exempted supply
B2B OIDAR service Taxable Reverse charge
B2B Other than OIDAR service Taxable Reverse charge

On September 26, 2023, the Indian government released a circular to end GST exemption enjoyed by overseas
online information and database access retrieval service (OIDAR) providers. This change, which comes into
effect from October 1, 2023, means that companies such as Facebook, Google, and various edtech platforms
will face an integrated GST (IGST) of up to 18 percent on their services provided to both individuals and the
government.

Until this recent change, OIDAR services provided by overseas companies to the Indian central government,
state governments, government authorities, or individuals for non-business purposes were exempt from taxation.

Example : Online information and data base access or retrieval services, where imported from Google and
Facebook by Mr. Rahim (unregistered person) located in taxable territory, for ₹20,000 on 1st January 2024. Is it
subject to GST?

Answer: Yes. It is taxable supply of service.

IGST is liable to pay by supplier of OIDAR namely, Google and Facebook in the given case.

Power to notify supply of a services or circumstances [Section 13(13)]

In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of
rules, the Government shall have the power to notify any description of services or circumstances in which the
place of supply shall be the place of effective use and enjoyment of a service.
w.e.f. 1-10-2019:
The CBIC vide Notification No. 04/2019-(IT), dated September 30, 2019 has notified the place of supply of R&D
services related to pharmaceutical sector provided by Indian pharma companies to foreign service recipients, as
the place of effective use and enjoyment of a service i.e. location of the service recipient subject to fulfilment of
the following conditions:
(i) Supply of services from the taxable territory are provided as per a contract between the service provider
located in taxable territory and service recipient located in non-taxable territory.

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Indirect Tax Laws and Practice

(ii) Such supply of services fulfils all other conditions in the definition of export of services, except sub-clause
(iii) Provided at clause (6) of section 2 of Integrated Goods and Services Tax, Act, 2017.
w.e.f. 01-10-2023, Insertion of new Section 14A in the IGST Act, 2017 [Special provision for specified
actionable claims supplied by a person located outside taxable territory] to provide that,-
▪️ A supplier of online money gaming [as defined in 2(80B) of CGST Act, 2017] not located in the taxable
territory, shall be liable to pay integrated tax in respect of said supply by him to a person in the taxable
territory.
▪ the said supplier shall obtain a single registration under the Simplified Registration Scheme[referred to in
sub-section (2) of section 14 of the IGST Act, 2017] for payment of integrated tax
▪️ Any person located in the taxable territory representing such supplier for any purpose in the taxable territory
shall get registered and pay the integrated tax on behalf of the said supplier.
▪️ If such supplier does not have a physical presence or does not have a representative for any purpose in the
taxable territory, he shall appoint a person in the taxable territory for the purpose of paying integrated tax and
such person shall be liable for payment of such tax.
▪️ In case of failure to comply with any of the aforesaid provisions by the said supplier or a person appointed
by him or both (notwithstanding anything contained in section 69A of the IT Act, 2000), any information
generated, transmitted, received or hosted in any computer resource used for supply of online money gaming
by such supplier shall be liable to be blocked for access by the public in such manner as specified in the said
Act.

Section 12 and 13 of IGST Act, 2017 summary:

The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
1 In relation to immovable Location of On tangible goods location where the services
property, short term property. Or are actually performed.
accommodation, If it is outside Services provided by way
On Individuals
organising event in any India, then of electronic means in
immovable property
(Section 12(3) of IGST location of (Section 13(3) of IGST relation to tangible goods,
Act, 2017) recipient. Act, 2017) then place of supply is the
actual location of goods.
2 Restaurant Catering Location where In relation to immovable Location of property
services Personal the services property
grooming Fitness are actually (Section 13(4) of IGST
services Beauty performed. Act, 2017)
treatment services
Health services
including cosmetic and
plastic surgery
(Section 12(4) of IGST
Act, 2017)

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The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
3 Services in relation Provided to Admission to or Where the event is actually
to training and a registered organization: held
performance appraisal. person: Cultural
(Section 12(5) of IGST Location of Artistic
Act, 2017) recipient of
Sporting
Service
Scientific
Provided to an
un-registered Educational
person: Entertainment event or
Location where Amusement park or any
the services other place.
are actually (Section 13(5) of IGST
performed. Act, 2017)
4 Admission to a Where the event Services in relation to location in the taxable
Cultural is actually held ● Performance on goods territory
Artistic or or individuals.
where the park ● Immovable property
Sporting
or such other ● Admission or
Scientific
place is located. organisation of events
Educational provided at more than
Entertainment event or one location, including
Amusement park or any a location of taxable
other place. territory.
(Section 12(6) of IGST (Section 13(6) of IGST
Act, 2017) Act, 2017)
5 Organization of a Provided to Services in relation to In each of the State or
Cultural a registered ● Performance on goods Union Territories
person: or individuals
Artistic
● Location of ● Immovable property
Sporting
recipient of
Scientific ● Admission or
Service
organisation of events
Educational Provided to an
performed in more than
Entertainment event un-registered
one State or Union
(Section 12(7) of IGST person:
Territory.
Act, 2017) ● Location
(Section 13(7) of IGST
where the
Act, 2017)
event is
actually held
and

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The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
● if the event
is held
outside India,
the place
of supply
shall be the
location of
the recipient.
6 Services by way of Provided to a SPECIFIED SERVICES Location of the Service
Transportation of goods registered per- INCLUDES: Provider
including by mail or son: a. Services provided by
courier ● Location of a banking company,
(Section 12(8) of IGST recipient of or financial company,
Act, 2017) Service. or a NBFC to account
Provided to an holders
un-registered b. Intermediary services
person: c. Services consisting
● Location at of hiring of means
which such of transport, other
goods are than,—
handed over (i) aircrafts, and
for their trans-
(ii) vessels except
portation.
yachts
omitted w.e.f.1st
upto a period of one
October 2023:
month
Provided that

where the (Section 13(8) of IGST

transportation Act, 2017)
of goods is to
a place outside
India, the place
of supply shall
be the place of
destination of
such goods.

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 Place of Supply

The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
7 Passenger transportation Provided to Omitted w.e.f. 1-10- Destination of such Goods
service. a registered 2023
Including: person: transportation of goods
Rail, Mono Rail, Metro ● Location of other than by way of
Rail, Road, Air, Vessel, recipient of mail or courier
boat, Cycle rickshaw, Service. (Section 13(9) of IGST
Bullock cart, Camel etc. Provided to an Act, 2017)
(Section 12(9) of IGST un-registered
Act, 2017) person:
● Place where
the passenger
embarks
on the
continuous
journey.
7a Right to passage is Provided to Passenger where the passenger
given for future use and a registered Transportation Services embarks on the conveyance
point of embarkation is person: (Section 13(10) of IGST for a continuous journey.
not known at the time of ● Location of Act, 2017)
issue of such right recipient of
(Section 12(9) of IGST Service.
Act, 2017) Provided to an
un-registered
person:
● Location
of recipient
when address
on record is
available.
● Location of
supplier in
other cases

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Indirect Tax Laws and Practice

The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
8 On board conveyance: Location of the Services Provided on The first scheduled point
Vessel first scheduled Board Conveyances of departure of that
point of (Section 13(11) of IGST conveyance for the journey.
Air craft
departure of that Act, 2017)
Train conveyance for
Motor vehicle. the journey.
(Section 12(10) of IGST
Act, 2017)
9 telecommunication services Online information Location of the recipient of
(Section 12(11) of IGST Act, 2017) and database access or service
retrieval services
(Section 13(12) of IGST
Act, 2017)

10 Banking and NBFC Location of In order to prevent double w.e.f. 1-10-2019:

service including Stock recipient of taxation or non-taxation The CBIC vide Notification
broking services Service on the of the supply of a service, No. 04/2019- (IT), dated
(Section 12(12) of IGST records of the or for the uniform September 30, 2019 has
Act, 2017) supplier of application of rules, the notified the place of supply
service. Govt. of India shall have of R&D services related
the power to notify any to pharmaceutical sector
Otherwise: description of service or provided by Indian pharma
Location of circumstances in which companies to foreign
supplier of the place of supply shall service recipients, as the
service. be the place of effective place of effective use and

use and enjoyment of a enjoyment of a service

service. i.e. location of the service
Section 13(13) of IGST recipient.
Act, 2017

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 Place of Supply

The Place of Supply of Services where Place of supply of service where location of Supplier
Sl. location of supplier and recipient is in of Service or Location of Recipient of Service is
No. India [Section 12 of IGST Act, 2017] outside India [Section 13(1) of the IGST Act, 2017]
Nature of supply Place of supply Nature of supply Place of supply
11 Insurance services To a registered
(Section 12(13) of IGST person
● Location of
Act, 2017)
recipient of
Service.
To a person
other than
registered
person
● Location of
the recipient
of services
on the
records of
the supplier
of service.
12 Advertisement services Located in each
to of such states
● Central Government and the value of
such supplies
● State Government specific to each
● Statutory Body state shall be
● Local Authority
in proportion
to amount
(Section 12(14) of IGST attributable to
Act, 2017) service provided
by way of
dissemination
in the respective
states.
13

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Case Studies and Illustrations

3.4
on Place of Supply
Case law: Universal Services India (P) Ltd., In re 2016 (42) STR 585 (AAR)
Facts of the case:

WWD will provide

said services to
Indian customers

The customers can either directly pay to WWD in

WWD – a US based Company is engaged in US Dollars using an international credit card or in
the business of providing name registration, Indian rupees using their Indian credit cards.
web hosting, designing and other services
to customers across the world.

Payment
Principal Collections would collected
to be remitted from
Principal without any customers
markup to WWD

In order to enable customers to pay for the services, using Indian credit card in Indian rupees, WWD intends
to enter into an agreement with the applicant – an Indian company.
The applicant submitted that the payment processing service would be the main service of the applicant where
it provides this service on its own account.

Point of dispute for which Advance Ruling is sought:

(i) Whether the place of provision of payment processing service proposed to be provided by the applicant, is
outside India in terms of Section 13(2) of the IGST Act, 2017?
(ii) Whether services proposed to be provided by applicant would qualify as ‘export of service’?

Ruling of Authority for Advance Ruling:

The definition of “intermediary” as envisaged under rule 2(f) of PoPS (now as per Section 2(13) of the IGST Act,
2017) does not include a person who provides the main service on his own account. In the present case, applicant
provides main service, i.e., “business support services” to WWD on his own account. Therefore, applicant is not an
“intermediary” and thus, the service provided by it is not intermediary service.

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Thus, AAR ruled that the place of provision of payment processing service to be provided by the applicant, is
outside India in terms of Section 13(2) of the IGST Act, 2017.
Further, while deciding the questions as to whether services provided by applicant qualify as export of service,
AAR observed that all conditions mentioned under Rule 6A of STR, 1994 (now as per Section 2(6) of the IGST
Act, 2017) are satisfied, and hence the said service will qualify as export of taxable service.

Maharashtra Authority for Advance Ruling in case of M/s Amogh Ramesh Bhatawadekar (2020):
The applicant, Amogh Bhatavdekar, located in Thane is a proprietor supplying digital goods, in the subject case
‘online gaming’ and has not obtained GSTIN because he is of the opinion that the services rendered by him is
export of e-goods (Digital Goods).
Applicant has stated that;
(a) Digital goods/e-goods are not necessarily goods as commonly understood & as defined in the GST Acts but
they can at best be called as “services”.
(b) They are supply of services done through internet or mails. There is no delivery of e-goods as such.
(c) The said e-goods, are stored on CLOUD which are located outside India, & are purchased from vendors
outside India who send it to the CLOUD as identified by the buyer / vendor / the applicant.
(d) The e-goods are not received by the seller in India but are stored on CLOUD hence it cannot be said to be
imports in India, hence out of purview of reverse charge mechanism under the IGST Act.
(e) The buyers are usually from abroad, who pay in dollars directly through PAYPAL, therefore it is supply
outside India taking it outside purview of IGST levy. It is export of services i.e. it is out and out services not
liable to either IGST or CGST & SGST. It is covered by the Circular NO. 78/52/2018 GST New Delhi dated
31/12/2018.

Observation and Order of AAR:

A perusal of the submissions made by the applicant reveals that Digital Goods are purchased by applicant from
the suppliers based abroad. Such digital goods, in this case online gaming, are then sent to the applicant by Email
or Instant message service. Thus we find that there is a supply of OIDAR services to the applicant from suppliers
based abroad. The nature of OIDAR services are such that it can be provided online from a remote location outside
the taxable territory. A similar service provided by an Indian Service Provider, from within the taxable territory,
to recipients in India would be taxable. In case where the supplier of such service is located outside India and the
recipient is a business entity (registered person) located in India, the reverse charge mechanism would get triggered
and the recipient in India who is a registered entity under GST will be liable to pay GST under reverse charge and
undertake necessary compliances. If the supplier is located outside India and the recipient in India is an individual
consumer not registered under GST Laws, in such cases also the place of supply would be India and the transaction
is amenable to levy of GST. In such case the individual should obtain registration and pay GST under reverse
charge.
For reasons as discussed in the body of the order, the questions are answered thus:-
Q1. Whether “e-goods” as commercially known in the market are “goods” as defined in the GST Acts or are
they services as per GST Act?
Ans: E-goods, in this case – ‘Online Gaming’ will be covered under services under the GST Act.
Q2. If they are goods what is the its HSN classification and or if services what is SAC classification & rate of
GST on its sale / supply within State?

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Ans: In view of observations made above the SAC will be 998439

Q3. Whether they are exempted from GST?
Ans: Answered in the negative
Q4. If not exempted what is the rate of GST on supply?
Ans: GST rate will be 18%
Q5. In what circumstances IGST under reverse charge will be applicable or whether it is applicable in the
situation of procurement from foreign supplier & supply from out of India as discussed above?
Ans: In the situation of procurement from foreign supplier & supply from out of India the applicant has to
discharge IGST liability under reverse charge mechanism.
Q6. If the customer is from India and paying the consideration in dollar, whether it will be allowed as exports
or if not allowed as exports, then whether GST is leviable? What is rate of SGST & CGST or IGST? Under
which HSN Code or SAC?
Ans: Since, both, the customer and the applicant are in India, GST would be liable @18% under SAC 998439.
Q7. In case buyer is from India the goods/services are stored in CLOUD which are the servers outside India
therefore even though payment is received in rupees, it is again export of services being services are
received from distantly installed servers. Hence, No CGST and SGST is leviable?
Ans: Said services are not export of services and hence GST must be discharged by the applicant.
Q8. Whether IGST is applicable under Section 5(3) & 5(4) of the IGST Act, according to us it is not imported
into India and the services are stored on CLOUD and therefore, it cannot be said to be imports and thus not
liable for RCM?
Ans: IGST is applicable under Section 5(3) & 5(4) of the IGST Act.

Clarification on supply of satellite launch services by ANTRIX Corporation Ltd:

How is the taxability of satellite launch services provided to both international and domestic customers by
ANTRIX Corporation Limited, which is a wholly owned Government of India Company under the administrative
control of Department of Space (DOS), determined?

In view of the above, place of supply of satellite launch services supplied by ANTRIX Corporation Limited to
international customers would be outside India in terms of section 13(9) of IGST Act, 2017 and such supply which
meets the requirements of section 2(6) of IGST Act, thus constitutes export of service and shall be zero rated in

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accordance with section 16 of the IGST Act. Where satellite launch service is provided by ANTRIX Corporation
Limited to a person located in India, the place of supply of satellite launch service would be governed by section
12(8) of the IGST Act and would be taxable under CGST Act, UTGST Act or IGST Act, as the case may be.

ANTRIX Corporation Limited to international customers:

Place of supply u/s 13(9) = outside India
Note: Export of service and hence, no GST.

ANTRIX Corporation Limited to a person located in India:

Place of supply u/s 12(8) = India
w.e.f. 1-2-2019 Provided 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.

ANTRIX Corporation Limited to a person located in India:

Place of supply u/s 12(8) = Outside India
Antrix Corporation Limited is not liable to pay IGST.
Note: Satellite services supplied by Indian Space Research Organisation, Antrix Corporation Limited or New
Space India Limited is exempted from GST (vide Notification No. 6/2020-IT, dated 15-10-2020).

Illustrations 61
(i) Mr. Z, a supplier registered in Hyderabad (Telangana), procures goods from China and directly supplies the
same to a customer in US. With reference to the provisions of GST law, examine whether the supply of goods
by Mr. Z to customer in US is an inter-State supply?
(ii) RST Inc., a corn chips manufacturing company based in USA, intends to launch its products in India.
However, the company wishes to know the taste and sensibilities of Indians before launching its products in
India. For this purpose, RST Inc. has approached ABC Consultants, Mumbai, (Maharashtra) to carry out a
survey in India to enable it to make changes, if any, in its products to suit Indian taste.
The survey is to be solely based on the oral replies of the surveyees; they will not be provided any sample by RST
Inc. to taste. ABC Consultants will be paid in convertible foreign exchange for the assignment.
With reference to the provisions of GST law, determine the place of supply of the service. Also, explain whether
the said supply will amount to export of service?

Solution:
(i) The transaction undertaken by Mr. Z is neither import nor export of goods in terms of Customs Act, 1962.
However, it is an inter-State supply in terms of provisions of section 7(5)(a) of the IGST Act, 2017 which
provides that when the supplier is located in India and the place of supply is outside India, supply of goods
or services or both in the course of inter-State trade or commerce.
However, w.e.f. 1-2-2019 it is treated as supply exclude “Supply of goods from a place in the non-taxable
territory to another place in the non-taxable territory without such goods entering into India”.
(ii) As per Section 13(2) of the IGST Act, 2017 place of supply = USA.
Since, all conditions specified under section 2(6) of the IGST Act, 2017 are fulfilled in the given case, the
same will be considered as an ‘export of service’.

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Illustration 62
ABC Pvt. Ltd., New Delhi, provides support services to foreign customers in relation to procuring goods from
India. The company identifies the prospective vendor, reviews product quality and pricing and then shares the
vendor details with the foreign customer. The foreign customer then directly places purchase order on the Indian
vendor for purchase of the specified goods. ABC Pvt. Ltd. charges its foreign customer cost plus 10% mark up for
services provided by it. For the month of December, 20XX, the company has charged US $ 1,00,000 (exclusive
of GST) to its foreign customer. With reference to the provisions of GST law, examine whether the company is
liable to pay IGST or CGST and SGST.
Note: GST @ 18% is applicable on supply of the support services provided by ABC Pvt. Ltd. Rate of exchange
is `65 per US $.

Solution:
As per Section 13(8)(b) of the IGST Act, 2017 the place of supply in case of intermediary services is the location
of the supplier (i.e. ABC Pvt, Ltd, New Delhi).
As per section 8(2) of the IGST Act, 2017 Subject to the provisions of section 12 supply of services where the
location of the supplier and the place of supply of services are in the same State is treated as intra-State supply. In
the given case it is not so.
Therefore, ABC Pvt. Ltd. New Delhi is liable to pay IGST (As per Sec. 7(5)(c) of IGST Act, 2017).
IGST 18% = `11,70,000 (i.e. `65 × 1,00,000 × 18%)

Illustration 63
M/s Jiju Ltd. an Indian Company, is a subsidiary of M/s Didi Ltd. of UK. The aforesaid holding company M/s
Didi Ltd. places an order for supply of certain goods on M/s Jiju Ltd. M/s Jiju Ltd. in turn, places an order on
a company located in China. M/s Jiju Ltd specifically asks the Chinese Company to supply the specified goods
directly to M/s Didi Ltd. on its behalf. M/s Jiju Ltd. shall receive the agreed price from M/s Didi Ltd. in convertible
foreign exchange.
In the light of above information whether supply of goods by M/s Jiju Ltd. to M/s Didi Ltd. shall qualify as
‘Export of Goods’?

Solution:
As per section 2(5) of the IGST Act, 2017, “export of goods” means taking goods out of India to a place outside
India. In our case, as goods are not moving out of India hence it cannot be termed as exports.
Place of supply of goods = U.K.
Location of supplier = India
However, M/s Jiju Ltd. is liable to pay IGST.
Note: Supply of goods from China to UK (i.e. from non-taxable territory to non-taxable territory.
As per the Finance Act, 2018 to be notified:
Schedule III Point No. 7, supply excludes: Supply of goods from a place in the non-taxable territory to another
place in the non-taxable territory without such goods entering into India.

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Illustration 64
Mr. M, an unregistered person and a resident of Pune, hires the services of M/s S Ltd. an event management
company registered in Delhi, for organizing of the new product launch in Bengaluru.
(i) Determine the place of supply of services provided by M/s S Ltd.
(ii) What would your answer be in case the product launch takes place in Bangkok?
(iii) What would your answer be in case Mr. M is a registered person and product launches takes place in
Bengaluru and Bangkok?
Solution:
(i) Place of supply = Bengaluru (i.e. location where the event is actually held, where recipient is unregistered
person).
(ii) Place of supply = Pune (i.e. if the event is held outside India, the place of supply shall be the location of the
recipient).
(iii) Place of supply = Pune (i.e. As per Sec. 12(7) of IGST location of Recipient is the place of supply since,
recipient is registered person).
Illustration 65
Determine the Place of supply for the following independent cases under the IGST Act, 2017:
(i) GGE, an event management company at Kolkata, organizes two award functions for Kalyan Jewellers of
Chennai (Registered in Chennai) at New Delhi and Singapore.
(ii) Perfect Planners (Bengaluru) is hired by Dr. K (unregistered person based in Kochi) to plan and organize his
son’s wedding at Mumbai.
Will your answer be different if the wedding is to take place at Malaysia?
Solution:
(i) Place of supply = Chennai
When service by way of orgnisation of an event is provided to a registered person, place of supply is the
location of recipient as per section 12(7)(a)(i) of IGST Act, 2017, even though the award functions at New
Delhi and Singapore are organized for Kalyan Jewellers (Registered person in Chennai), place of supply in
both the cases is location of Kalyan Jewellers i.e. Chennai.
(ii) Place of supply = Mumbai (Refer Section 12(7) of IGST)
Place of supply = Kochi (Refer Section 12(7) of IGST)
Illustration 66
RR, a registered supplier under GST in Mumbai, is directed by M/s N Enterprises, Kolkata to deliver goods
valued at `12,00,000 to Fabricana of Aurangabad in Maharashtra. RR makes out an invoice at 9% tax rate under
CGST and SGST respectively (scheduled rate) and delivers it locally in Maharashtra.
Discuss and comment on the above levy of tax and determine the tax liability of goods in the above circumstances.
Solution:
Place of supply = Kolkata (Sec. 10(1)(b) of IGST Act, 2017)
Location of supplier of goods = Mumbai
RR is liable to pay IGST.
IGST = `2,16,000 (i.e. `12,00,000 × 18%)

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Illustration 67
Mr. MG, an interior decorator provides professional services to Mr. HJ in relation to two of his immovable
properties.
Determine the place of supply in the transactions below as per provisions of GST law in the following independent
situations:

Case Location of Mr. MG Location of Mr. HJ Properties situated at

I Delhi Mumbai New York (USA)
II Delhi New York Paris (France)
Explain the relevant provisions of law to support your conclusions.

Solution:
Location of Mr. Location of Properties
Case Place of Supply
Mahendra Goyal Mr. Harish Jain situated at
I Delhi Mumbai New York (USA) Mumbai (As per section 12(3)(a) of
IGST Act, 2017.
II Delhi New York Paris (France) Paris (France).
As per Section 13(4) of IGST Act, 2017.

Illustration 68
Determine the place of supply of service as well as their taxability in each of the following cases with brief
reasons:
(a) XY Ltd. of Delhi, agrees to provide ‘technical inspection and certification service’ in respect of a newly
developed product of an overseas firm (for a newly launched motorbike which has to meet emission standards
in different states or countries). The overseas firm has provided its newly developed product to XY Ltd. for
the purpose of testing. The testing is carried out in Delhi (15%), Assam (35%) and Sweden (50%).
(b) A movie on demand is provided as on board entertainment during the Kolkata-Delhi leg of a Bangkok-
Kolkata-Delhi Flight.
Solution:
(a) As per Section 13(6) of IGST Act, 2017, Place of supply of service will be the place in the taxable territory
(i.e. Delhi and Assam).
X Ltd is liable to pay IGST for the part of Delhi
X Ltd is liable to pay IGST for the part of Assam.
X Ltd is also liable to pay IGST for the services rendered in Sweden.
It means tax will be payable on the entire value.
(b) As per section 13(11) of the IGST Act, 2017, PoS is Bangkok which is non taxable territory, not subject to
GST.

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Illustration 69
Swamy Ltd. of Chennai acquires the business of SA Ltd. at Johannesburg, South Africa. Swamy Ltd. entered
into a contract with M/s Krish & Krish Architects, Chennai to do the interiors of the building of new business at
South Africa. The Central Tax department issued a notice demanding GST based on the Place of supply of service
provisions. Discuss briefly the applicability of the Place of supply of service to M/s Krish & Krish as the work to
be done is outside the taxable territory.

Solution:
Place of supply of services supplied directly in relation to an IMMOVABLE PROPERTY as per Section
13(4) of IGST is where immovable property is located or intended to be located.
However, location of supplier and location of recipient is in India we should refer section 12(3)(a) of IGST
Act, 2017, accordingly place of supply of service is where immovable property located or intended to be
located in India. If location of Immovable property is outside India, then place of supply is location of the
recipient.
In the given case location of supplier and location of recipient is in India and hence, place of supply of
service is Chennai section 12(3)(a) of IGST. Location of supplier of service is in Chennai. CGST and SGST
will be levied (sec. 8(2) of IGST subject to sec. 12).
From the above it is evident that the claim of the Central Tax Department is correct.

Illustration 70
With reference to the GST provisions briefly explain:
(i) time of supply under reverse charge with respect to payment date.
(ii) Place of supply of service of hiring of all means of transport (except vessel and air craft) upto a period of one
month, where location of supplier or location of recipient is from outside India.
Solution:
(i) The phrase “the date on which payment received by the Supplier” or “the date of payment” means—
~ the date on which payment is entered in his books of accounts
or
~ the date on which the payment is debited to his bank account,
whichever is earlier.
(ii) SPECIFIED SERVICES [Section 13(8)(c) of the IGST Act, 2017]
PLACE OF SUPPLY OF SERVICES = LOCATION OF THE SERVICE PROVIDER

Illustration 71
With reference to the position of Goods and Service Tax law as applicable on or after 01.07.2017, what would be
the place of supply of service in the following independent cases?
(i) MN Trade Links of New Delhi are appointed as commission agent by a foreign company for sale of its goods
to Indian customers. In lieu of their services, MN Trade Links receive a fixed percentage of commission
from the concerned foreign company.
(ii) OP Fabricators of Mumbai has temporarily imported certain goods from its customer located in Hongkong
for repairs. The said goods have been re-exported to Hongkong after carrying out the necessary repairs
without being put to any use in Mumbai.
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(iii) UV Airlines, an airline located in New Delhi, has hired aircrafts from a foreign Airlines for a period of 15
days.

Solution:
(i) Place of supply of service = New Delhi (i.e. location of supplier of service section 13(8)(b) of the IGST Act,
2017). IGST will be levied.
(ii) Place of supply of service = Hongkong (i.e. location of recipient of service as per Section 13(2) of the IGST
Act, 2017). No GST will be levied.
(iii) Place of supply of service = New Delhi (i.e. location of recipient of service as per Section 13(2) of the IGST
Act, 2017). IGST will be levied.

Illustration 72
Determine the place of supply of service in each of the following independent cases and state whether GST is
payable in each of these cases:

(a) Mr. A travelled on a Bagdogra-Dibrugarh-Singapore-Dibrugarh-Bagdogra flight where a single ticket with

no stopover has been issued by Parkinson Airlines located in Dubai.
(b) Mr. B, a well-known comedian from Delhi, organises a stage-show in Japan. For organising the stage-show,
he takes the services from a Mumbai based event organiser.

Solution:
(a) Place of supply of services = Bagdogra of West Bengal (As per Section 13(10) of the IGST). However, it is
specifically exempted from GST.
(b) Place of supply of service = Delhi (i.e. location of recipient of service). IGST is payable by supplier of
service (Section 12(7) of the IGST).

Illustration 73
M/s. X Ltd. of Chennai, engaged in various businesses has provided the following services, whose values are
listed below. Compute its GST liability:

(1) Service of interior decoration in respect of immovable property located in Jammu: `5 lakh;
(2) Service of renting of commercial buildings in Delhi: `15 lakh;
(3) Architectural services to an Indian Hotel Chain which has business establishment in Mumbai for its newly
acquired property in Sydney: `25 lakhs;
(4) Services provided as an Indian agent undertaking marketing in India of goods of a foreign seller: `51 lakhs;
(5) Services provided as travel agent undertaking marketing in India of services of a foreign seller: `1 lakh.
Applicable rate of GST 18%.

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Solution:
Particulars Value ` (in lakhs) Working note
Interior decoration services 5 PoS = J & K (Section 12(3)(a) of IGST)
taxable territory. IGST will be levied
Renting of commercial 15 PoS = Delhi (Section 12(3)(a) of IGST)
buildings Taxable territory IGST will be levied
Architectural services 25 PoS = Mumbai (Section 12(3)(a) of IGST).
Taxable territory IGST will be levied
Marketing of Goods 51 PoS = Chennai (Section 13(8)(b) of IGST)
Taxable territory, IGST will be levied.
Travel agent 1 PoS = Chennai (Section 13(8)(b) of IGST)
Taxable territory IGST will be levied.
Taxable supply of services 97
IGST liability 17.46
Pos = Place of Supply

Illustration 74

Samy Pvt. Ltd., owned by Rang Tarang- a famous classical singer - wishes to organise a ‘Rang Tarang Music
Concert’ in Gurugram (Haryana). Samy Pvt. Ltd. (registered in Ludhiana, Punjab) enters into a contract with an
event management company, Pooja (P) Ltd. (registered in Delhi) for organising the said music concert at an agreed
consideration of ` 10,00,000. Pooja (P) Ltd. books the lawns of Hotel Dumdum, Gurugram (registered in Haryana)
for holding the music concert, for a lump sum consideration of ` 4,00,000. Samy Pvt. Ltd. fixes the entry fee to the
music concert at ` 5,000. 400 tickets for ‘Rang Tarang Music Concert’ are sold.

You are required to determine the CGST and SGST or IGST liability, as the case may be, in respect of the
supplie(s) involved in the given scenario.

Will your answer be different if the price per ticket is fixed at ` 450?

Note: Rate of CGST and SGST is 9% each and IGST is 18%. All the amounts given above are exclusive of taxes,
wherever applicable.

Solution:

In the given situation, three supplies are involved:

(i) Services provided by Samy Pvt. Ltd. to audiences by way of admission to music concert.

(ii) Services provided by Pooja (P) Ltd. to Samy Pvt. Ltd. by way of organising the music concert.

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(iii) Services provided by Hotel Dumdum to Pooja (P) Ltd. by way of accommodation in the Hotel lawns for
organising the music concert.

(i) Section 12(6) of IGST: Place of supply = where event is held (i.e. Gurugram, Haryana)

Location of supplier = Ludhiana, Punjab

IGST = (400 tickets × `5,000 per ticket) × 18% = `3,60,000

(ii) Section 12(7) of IGST: Place of supply = location of recipient who is a registered person (i.e. Ludhiana,
Punjab)

Location of supplier = Delhi

IGST = `10,00,000 × 18% = `1,80,000

(iii) Section 12(3)(c) : Place of supply = Location of immovable property (i.e. Gurugram, Haryana)

Location of supplier = Gurugram, Haryana.

CGST = `4,00,000 × 9% = `36,000

SGST = `4,00,000 × 9% = `36,000

If the price for the entry ticket is fixed at ` 450:

Admission to music concert is exempted supply under GST.

However, there will be no change in the answer in respect of supplies mentioned in point (ii) and (iii) above.

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Exercise
A. Theoritical Questions
~ Multiple Choice Questions

1. Which of the following is an inter-State supply?

(a) Supplier of goods located in Chennai and place of supply of goods is to an SEZ located in Chennai

(b) Supplier of goods located in Chennai and place of supply of goods in Jaipur

(c) Supplier of goods located in Chennai and place of supply of goods is to an SEZ located in Chandigarh

(d) All the above

2. Which of the following is an intra-state supply?

(a) Supplier of goods located in Chennai and place of supply of goods SEZ located in Chennai

(b) Supplier of goods located in Chennai and place of supply of goods in Jaipur

(c) Supplier of goods located in Chennai and place of supply of goods in Chennai

(d) All the above

3. Which of the following transaction is inter-state supply of goods involving movement of goods?

(a) Location of supplier is in Hyderabad and location of recipient is in Mumbai and goods are shipped
to Kolkata

(b) Location of supplier is in Hyderabad and place of supply is Mumbai

(c) Location of supplier and place of supply is Hyderabad

(d) None of the above

4. Money transferred service provided to foreign entity by Indian supplier of service is intermediary service
and subject to

(a) CGST & SGST

(b) CGST & UTGST

(c) IGST

(d) UTGST

5. A. No GST shall be payable on transhipment of goods at customs station in India for further
transportation out of India.

B. In case of import of goods by vessel from out of India to first customs port in India, the importer in
India is liable to pay GST under reverse charge.

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Comment on the above statements

(a) A – Correct. B – Incorrect
(b) A – Incorrect, B – Correct
(c) Both A & B – Correct
(d) Both A & B- Incorrect
6. What is the Place of Supply in case the supply is made in territorial waters?
(a) Location in territorial waters
(b) Coastal State or Union territory where the nearest point of the appropriate baseline is located
(c) Either (a) or (b)
(d) None of the above
7. Supply of goods in the course of import into the territory of India is
(a) Intrastate supply
(b) Inter-State supply
(c) Export
(d) Neither Export nor Import
8. If RR shipping Co. located in Chennai charges ocean freight charges for transport of goods to USA for
a customer located in Hyderabad, the place of supply of service will be
(a) Chennai
(b) USA
(c) Hyderabad
(d) None of the above
9. M/s XYZ is having two SEZ in State of Maharashtra. One of these SEZ sends goods to another SEZ on
1st April 20XX. What shall be chargeable on such supply?
(a) IGST
(b) CGST + SGST
(c) Self-supply and hence, no GST
(d) None of the above
10. Person supplying goods or services or both from the territorial waters should register in—
(a) Coastal State or Union Territory
(b) State of their residence
(c) Only in Delhi
(d) State of their place of business

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11. Maintenance & repair service provided within territorial waters to marine vessel owned by foreign
company is

(a) Not export of service even if payment is received in forex

(b) Not export of service if payment is received in Indian Rupees

(c) Export of service if payment is received in forex

(d) Export of service even if payment is received in Indian Rupees

12. Stylish a modelling agency, registered in Mumbai having 10 models entered into a contact for beauty
treatment of their models with Fair & Lovely in Delhi but the beauty treatment was done before a
fashion show in the city of Hyderabad. What is the place of supply?

(a) Mumbai

(b) Delhi

(c) Chennai

(d) Hyderabad

13. Agency fees paid to foreign banks for arranging finance is—

(a) Export of service

(b) Import of service

(c) Tax free service

(d) None of the above

14. Mr. B director of M/s Ram Ltd. registered in Chennai went for 2 days official seminar in Delhi. He
booked a hotel in Delhi & provided the company’s GSTIN.

What is the place of supply?

(a) Delhi

(b) Chennai

(c) Either (a) or (b)

(d) None of the above

15. What tax shall be levied on this supply?

(a) Delhi GST + CGST

(b) Chennai GST + CGST

(c) IGST

(d) CGST + UTGST

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16. Will Ram Ltd. get the credit of the taxes paid to the hotel?
(a) Yes
(b) No
(c) Maybe
(d) Yes, with prior permission of Jurisdictional Commissioner
17. Mr. OBAMA of USA came to Chennai for personal visit and booked a room in Taj Hotel of Chennai.
What GST is liable to pay by Taj Hotel of Chennai where payment received in US Dollars?
(a) CGST + SGST
(b) IGST
(c) Zero rate of GST
(d) None of the above

Answer:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
d c a c c b b c a a
11. 12. 13. 14. 15. 16. 17.
a d b a a b b

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