Place of Supply under GST

Pramit Pratim Ghosh |Updated on: May 23, 2022

What is GST Place of Supply?
Place of Supply under GST when there is Movement of Goods
Place of Supply under GST when there is No Movement of Goods
Place of Supply under GST in case of Bill – to – Ship - to Transactions
Place of Supply of Services under GST
Place of Supply for Services Provided at Immovable Properties under GST
Place of Supply under GST of Specific Services

What is GST Place of Supply?

Under GST, the existing system of levy of tax on manufacture, provision of taxable services, and sale of goods will be replaced by the concept of ‘Supply’. It is very important, therefore, to understand the “place of supply” meaning in determining the right charge of tax on supply.

There are two important components that determine the tax to be charged on a supply:

Location of the Supplier It is the registered place of business of the supplier
Place of Supply It is the registered place of business of the recipient

In an intra-state supply, the taxes to be charged are CGST and SGST.

In an interstate supply, the tax to be charged is IGST. The following are also treated as interstate supplies:

Import of goods or services
Export of goods or services
Supply of goods or services to or by a SEZ developer or SEZ unit, even if the supply is within the state.

Place of Supply under GST when there is Movement of Goods

When a supply involves movement of goods, the place of supply is the location at which the movement of goods terminates for delivery to the recipient.

Place of Supply under GST when there is No Movement of Goods

When supply does not involve movement of goods, the location of the goods at the time of delivery to the recipient is the place of supply.
When the goods are assembled or installed at site, the place of assembly or installation is the place of supply
When the goods are supplied on board a mode of conveyance, the location at which the goods are taken on board is the place of supply

Place of Supply under GST in case of Bill – to – Ship - to Transactions

In the Bill to – Ship to model, the billing and shipping of goods are done to two states and entities. In order to avoid the cascading of multiple taxes through the course of the transaction, the first sale will be taxable, and any subsequent sale during the movement of goods is exempt from tax.

Under GST, the place of supply of goods is very critical to determine the transaction as interstate or intrastate. Accordingly, the applicable taxes can be levied. In GST, if the goods are supplied by the supplier to the recipient on the direction of a third person, it will be deemed that the third person has received the goods, and the place of supply will be the principal place of business of such third person.

Place of Supply of Services under GST

Under GST, place of supply of services will determine the type of tax applicable on the service. This is based on the concept of GST being a ‘destination based consumption tax’, where tax will accrue to the State where the supply is consumed.

The rules for determining the place of supply of services are different from the rules for determining the place of supply of goods. In case of goods, the movement of goods largely decides the place of supply. Services, being intangible, have no fixed manner of delivery. Also, in certain cases of supply of service, the location of the supplier and/or recipient may not be fixed or even ascertainable. It is thus important for businesses to evaluate the place of supply in GST with example, to understand the subject better.

When a service is supplied to a registered person

In the GST regime, the place of supply must be determined to identify the type of GST to be charged. When a taxable service is supplied to a registered person (regular/composition dealer), the registered place of business of the recipient will be the place of supply.

Supply to a registered person within the same state

When a service is supplied to a registered person within the same state, the taxes applicable are CGST and SGST.

Supply to a registered person in a different state

When a service is supplied to a registered person in a different state, the tax applicable is IGST.

When a service is supplied to an unregistered person

In the GST regime, when a service is supplied to an unregistered person, there can be 2 scenarios:

The address of the recipient exists in the records of the supplier

When a service is supplied to an unregistered person whose address exists in the supplier’s records, the place of supply will be the location of the recipient in the supplier’s records.

The address of the recipient does not exist in the records of the supplier

When a service is supplied to an unregistered person whose address does not exist in the supplier’s records, the place of supply will be the location of the supplier

Place of Supply for Services Provided at Immovable Properties under GST

In case of services supplied in relation to an immovable property, specific rules have been laid down for determining the place of supply. These rules override the general rules for determining the place of supply of services. Place of supply of services provided in relation to an immovable property will be the location at which the immovable property is located or intended to be located.

There can be four scenarios for this:

Services provided directly in relation to an immovable property - This includes services provided by architects, interior decorators, surveyors, engineers, etc.
Lodging in an immovable property - This includes accommodation provided by a hotel, inn, guest house, homestay, club, campsite, house boat, etc.
Accommodation in an immovable property for organizing a function - This includes accommodation for organizing any official, social, cultural, religious or business function.
Any services supplementary to the services mentioned above

Place of Supply under GST of Specific Services

Type of Service	Type of Recipient	Place of Supply
Restaurant and catering services	Not applicable	Location where the service is rendered
Personal grooming, fitness, beauty treatment and health services, including cosmetic and plastic surgery	Not applicable	Location where the service is rendered
Services in relation to training and performance appraisal	Registered person	Location of the recipient
Services in relation to training and performance appraisal	Unregistered person	Location where the service is rendered
Services provided through admission to a cultural, artistic, sporting, scientific, educational or entertainment event or amusement park	Not applicable	Location where the event is held
Services provided through organisation of a cultural, artistic, sporting, scientific, educational or entertainment event	Registered person	Location of the recipient
	Unregistered person	Location where the event is held
Services provided using fixed telecommunication line, leased circuits, internet leased circuits, cable or dish antenna	Not applicable	Location where the telecommunication line, leased circuit, cable connection or dish antenna is installed
Post-paid mobile connection	Not applicable	Billing address of the recipient on the records of the supplier
Prepaid mobile connection	Not applicable	When supplied by a selling agent/re-seller/distributor of the supplier : Address of the selling agent /re-seller/distributor as per the records of the supplier at the time of supply
Prepaid mobile connection	Not applicable	When recharge is done through internet banking or other electronic modes of payment : Location of the recipient in the records of the supplier
Insurance services	Registered person	Location of the recipient
Insurance services	Unregistered person	Location of the recipient in the records of the supplier
Banking and other financial services	Not applicable	Location of the recipient in the records of the supplier
Banking and other financial services	Not applicable	If the location of the recipient is not in the records of the supplier, place of supply will be the location of the supplier
Transportation of goods	Registered Person	Location of the recipient
Transportation of goods	Unregistered person	Location at which the goods are handed over for transportation
Transportation of passengers	Registered Person	Location of the recipient
Transportation of passengers	Unregistered person	Place where the passenger embarks on the conveyance for a continuous journey
Services supplied on board a conveyance	Not applicable	Location of the first scheduled point of departure of the conveyance for the journey