Goods and Services Tax (GST) is a destination based tax where place of supply is based on the place of consumption of goods and services. Under GST regime, a supply can be intra-state or inter-state. A supply partakes the character of intra-state or inter-state on the basis of place of supply. If a particular supply falls under the category of intra-state supply, then CGST+SGST would be leviable on such supply. On the other hand, if a supply falls under the category of inter-state supply, then IGST would be leviable on that supply. Section 12 of the IGST Act, 2017 deals with the provisions for place of supply of services where location of the supplier and recipient is in India.
Section12(2) of the IGST Act, 2017 is a default or general rule. It reads as below-
“(2) The place of supply of services, except the services specified in sub-sections (3) to (14),-
(a) made to a registered person shall be the location of such person;
(b) made to any person other than a registered person shall be,-
(i) the location of the recipient where the address on record exists; and
(ii) the location of the supplier of services in other cases.”
Further, section 2(14) of the IGST Act, 2017 defines “location of the recipient of services” as below-
“(14) ― “location of the recipient of services” means, ––
(a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;
(b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and
(d) in absence of such places, the location of the usual place of residence of the recipient;”
Example
Mr X is a professional located in Mumbai. Mr Y of Ahmedabad approached him in Mumbai to avail his services. In this case, place of supply for Mr X would be Ahmedabad irrespective of the fact that Mr Y is a registered person or not. Again, if Mr X comes to Ahmedabad to give services to Mr Y, then also place of supply would be Ahmedabad. In both the cases, IGST would be leviable.
Section 12(3) to section 12(14) of the IGST Act, 2017 deals with the place of supply provisions in respect of certain specific services which are as below: –
| Sl No | Section | Services | Place of supply of services |
| 1 | 12(3) | (a) Services directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; (b) By way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel; (c) By way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; (d) Any services ancillary to the services referred to in clauses (a), (b) and (c), | Location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located. If the location of the immovable property or boat or vessel is located or intended to be located outside India:- The place of supply shall be the location of the recipient. Where the immovable property or boat or vessel is located in more than one state or union territory, the supply of services shall be treated as made in each of the respective states or union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. |
| 2 | 12(4) | Restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery | Location where such services are actually performed. |
| 3 | 12(5) | Training and performance appraisal | When supply of such services made to a- i) Registered person – Location of such person ii) Person other than registered person– Location where such services are actually performed |
| 4 | 12(6) | Services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto | The place where the event is actually held or where the park or such other place is located. |
| 5 | 12(7) | (a) 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; (b) Services ancillary to organisation of any of the events or services referred to in (a) above or assigning of sponsorship to such events | When supply of such services made to a- i) Registered person – Location of such person. ii) Person other than registered person– The place where the event is actually held. If the event is held outside India- The place of supply shall be the location of the recipient. Where the event is held in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such event, the place of supply of such services shall be taken as being in each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. |
| 6 | 12(8) | Transportation of goods, including by mail or courier | When supply of such services made to a- i) Registered person – Location of such person. ii) Person other than registered person-Location at which such goods are handed over for their transportation. Where the transportation of goods is to a place outside India- The place of supply shall be the place of destination of such goods. |
| 7 | 12(9) | Passenger transportation service | When supply of such services made to a- i) Registered person – Location of such person. ii) Person other than registered person– The place where the passenger embarks on the conveyance for a continuous journey. Where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2) of Section 12 of the IGST Act, 2017. The return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time. |
| 8 | 12(10) | Supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle | Location of the first scheduled point of departure of that conveyance for the journey. |
| 9 | 12(11) | Telecommunication services including data transfer, broadcasting, cable and direct to home television services | (a) In case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna:- Location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services. (b) In case of mobile connection for telecommunication and internet services provided on post-paid basis:- Location of billing address of the recipient of services on the record of the supplier of services. (c) In cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means,— (i) through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or (ii) by any person to the final subscriber, be the location where such pre-payment is received or such vouchers are sold. (d) In other cases, be the address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services. 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 services. If such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on the record of the supplier of services shall be the place of supply of such services. Where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. |
| 10 | 12(12) | Insurance Service | When supply of such services made to a- i) Registered person – Location of such person. ii) Person other than registered person– Location of the recipient of services on the records of the supplier of services. |
| 11 | 12(13) | Banking and other financial services including stock broking services | Location of the recipient of services on the records of the supplier of services. If the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services. |
| 12 | 12(14) | Supply of advertisement services to the Central Government, State Government, statutory body or local authority meant for the States or Union territories identified in the contract or agreement | Location would be in each of such states or union territories. The value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be 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. |
Example
- M/s A Ltd registered at Delhi hires Mr B registered at Maharashtra to provide training to its sales personal at Mumbai. Here, as M/s A Ltd is a registered person, the place of supply would be the location of the recipient i.e. Delhi.
- M/s A (unregistered person) of Delhi, hires Mr B registered at Maharashtra to provide training to its sales personal at Mumbai. Here, as M/s A is an unregistered person, the place of supply would be the place where such training is conducted i.e. Mumbai.
- M/s A Ltd registered at Delhi hires Mr B, an event manager registered at Mumbai to organise their annual sales event at Mumbai. Here, as M/s A Ltd is a registered person, the place of supply would be the location of the recipient i.e. Delhi.
- Mr X of Gujrat visits an amusement park at Mumbai, Maharashtra by paying necessary admission fee. Here, place of supply would be the location of the park i.e. Maharashtra.
- M/s A Ltd registered at Delhi hires catering services from Mr B registered at Maharashtra for their training program held at Mumbai. Here, place of supply would be the location where such services are actually performed i.e. Maharashtra.
- Mr A (unregistered person) of Gujrat hires M/s XYZ, an event manager registered at Delhi to organise their family function at Delhi. Here, as Mr A is an unregistered person, place of supply would be location of the event i.e. Delhi.