In our previous article, we have covered the concept of place of supply of goods. In this article, we will discuss the place of supply of services.
For determining Place of Supply of services, in general, you need to consider either the location of the supplier or the location of the recipient.
➡ General Rule u/s 12(2) of IGST Act, 2017
| Section No | Transaction | Place of Supply of Services | |||||
| 12(2)(a) | Service is made to a Registered Recipient | Location of Recipient | |||||
| 12(2)(b)(i) | Service is made to an unregistered recipient and his address is availabe | Location of Recipient | |||||
| 12(2)(b)(ii) | Service is made to an unregistered recipient and his address is not availabe | Location of Supplier | |||||
➡ Special Rule u/s 12(3)-(13) of IGST Act, 2017
| Section No | Transaction | Place of Supply of Services | |||||
| 12(3) | Service is made directly in relation to an Immovable property:- | ||||||
| (i) Located In India | Location of immovable property | ||||||
| (ii) Located outside India | Location of Recipient | ||||||
Example:
Mr.Ram, a resident of Patna, hires Mrs.Suman, an Interior Decorator, from Chennai (irrelevant) for his house at Kolkata. In this case, the place of supply of service is in Kolkata (location of immovable property). However, If the house is located in Africa than the place of supply of service will be Patna (location of the service recipient).
| Section No | Transaction | Place of Supply of Services | |||||
| 12(4) | Service by restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery | Location where the services are performed | |||||
| 12(5) | Service in relation to training and performance appraisal to a registered recipient | ||||||
| (i) To a registered recipient | Location of Recipient | ||||||
| (ii) To a non-registered recipient | Location where services are performed | ||||||
Example: u/s 12(4) of IGST Act, 2017
Mr.Shyam, a resident of Patna visits Kolkata for 3 days and during his stay, he went to restaurants, Gym and Men’s parlor. Place of supply of all the services is in Kolkata (Place where these services are performed).
Example: u/s 12(5) of IGST Act, 2017
XYZ Ltd, of Kolkata, for training their staffs hires BCG Ltd a consultancy firm of Patna. The training will be conducted in Chennai. XYZ Ltd is registered under GST. In this case, place of supply of service is Kolkata (location of Recipient).
Mr.Mohan, of Kolkata, attends a training program conducted by BCG Ltd a consultancy firm of Patna. Training was conducted in Chennai. Mr.Mohan is not registered under GST. In this case, place of supply of service is in Chennai (location where service is performed).
| Section No | Transaction | Place of Supply of Services | |||||
| 12(6) | Service of admission to an event or amusement park | Location of event or park | |||||
| 12(7) | Service for the organisation of an event or assigning of sponsorship to such event:- | ||||||
| (i) To a registered recipient | Location of Recipient | ||||||
| (ii) To a non-registered recipient | (i) Location of Event, if held in India (ii) Location of Recipient, if held outside India | ||||||
Example: u/s 12(6) of IGST Act, 2017
Mr.Shyam, a resident of Patna, buys a ticket of an Aquatica (Water Park) in Kolkata. In this case, place of supply of service of admission is in Kolkata (location of the park).
Example: u/s 12(7) of IGST Act, 2017
XYZ Ltd, registered in Kolkata, hires an event management company to organise its AGM in Chennai. XYZ Ltd is registered under GST. In this case, place of supply of Service for the organisation of AGM is Kolkata, being the location of Recipient. Location of event is irrelevant in case of a registered recipient.
Mr.Ram, a resident of Kolkata, hires an event management company to organise his birthday party in Chennai. Mr.Ram is not registered under GST. In this case, place of supply of Service for the organisation of birthday party is in Chennai, being the location of Event. However, if the party was in London than the place of supply of services would be Kolkata, being the location of Recipient.
| Section No | Transaction | Place of Supply of Services | |||||
| 12(8) | Services of transportation of goods, including by mail or courier:- | ||||||
| (i) To a registered recipient | Location of Recipient | ||||||
| (ii) To a non-registered recipient | Place where such goods are handed for transportation | ||||||
| 12(9) | Services of transportation of passenger:- | ||||||
| (i) To a registered recipient | Location of Recipient | ||||||
| (ii) To a non-registered recipient | Place where the passenger begins journey | ||||||
| 12(10) | Services on board of a conveyance | Location of 1st scheduled departure of the conveyance | |||||
Example: u/s 12(8) of IGST Act, 2017
Meteorio, an e-commerce located in Asansol (West Bengal) contracted FedEx Courier for delivering goods. Meteorio is registered under GST. FedEx’s office is located in Dhanbad (Jharkhand). In this case, Place of supply of courier services is in Asansol, being the location of Recipient.
Mr.Mohan, a resident of Asansol (West Bengal) went to Dhanbad (Jharkhand) and from there he couriered a document through FedEx courier. Mr.Mohan is not registered under GST. Office FedEx is located in Dhanbad (Jharkhand). In this case, Place of supply of courier services is in Dhanbad (Place where the document was handed for transportation).
Example: Place of Supply of Service for reverse charge (RCM)
Mr.Ram, registered in Patna, sends goods to Kolkata through a Goods Transport Agency (GTA) of Gaya (Bihar). Mr.Ram is liable to pay GST under RCM. The service provider is GTA and the Service recipient is Mr.Ram.
In this case, Place of supply of Transportation service is Patna i.e the location of Mr.Ram. As both, the place of supply of service and location of Service provider is in the same state (Bihar), Mr.Ram should pay CGST and SGST under RCM.
If the GTA was registered in another state than Mr.Ram should have charge IGST.
Example: u/s 12(9) of IGST Act, 2017
XYZ Ltd, registered in Kolkata, hires a Transport Company for a site visit to Chennai. XYZ Ltd is registered under GST. In this case, place of supply of passenger transport service is Kolkata (location of Recipient).
Mr.Ram, a resident of Patna, visits Kolkata via bus. He begins his journey from Dhanbad (Jharkhand). Mr.Ram is not registered under GST. In this case, place of supply of passenger transport service is Dhanbad, being the Place from where Mr.Ram begins the journey.
Example: u/s 12(10) of IGST Act, 2017
Mr.Ram, a resident of Patna (irrelevant), visits Kolkata via Flight. He begins his journey from Delhi. The Flight flies from Mumbai to Kolkata. In the flight, he purchases a movie to watch on the Flight. In this case, place of supply of Services on board is Mumbai, being the location of 1st scheduled departure of the flight.
| Section No | Transaction | Place of Supply of Services | |||||
| 12(11) | Telecommunication services by way of:- | ||||||
| (i) Fixed telecommunication line | Place where telecommunication line installed | ||||||
| (ii) Postpaid Mobile Connection | Location of Recipient | ||||||
| (iii) Prepaid Mobile Connection and payment is made through recharge voucher | (i) Location of recharge seller, or (ii) Location of prepayment (in other cases) | ||||||
| (iv) Prepaid Mobile Connection and electronic payment is made | Location of Recipient | ||||||
| (v) In Other Case | (i) Location of Recipient (if available), otherwise (ii) Location of Supplier | ||||||
| 12(12) | Banking and Financial services | ||||||
| (i) To a registered recipient | Location of Recipient | ||||||
| (ii) To a non-registered recipient | Location of Supplier | ||||||
| 12(13) | Insurance Services | Location of Recipient | |||||
Source: IGST Act, 2017
About Author
Pravin Giri
(@Pravin) Twitter | FacebookPravin is a Qualified Chartered Accountant [CA]. Gives opinions on Income tax, GST, and finance.Find him on Twitter @Pravinkumargiri
Popular topicsIncome tax Income from other sources Deduction Salary Personal Finance Senior citizen House Property Capital Gain TDS GST Companies Act GST FAQ TCS
