2019-06-27 20:56:24GST CenterEnglishThis article lays down the provisions related to the place of supply of services where the location of supplier and the recipient is...https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2019/06/Place-of-Supply-of-Services-in-GST-e1561649141494.jpghttps://quickbooks.intuit.com/in/resources/gst-center/place-of-supply-of-services/Place of Supply of Services: Know Section 13 of cgst & igst %%sep%% %%sitename%%

Place of Supply of Services: Where Location of Supplier & Recipient is Outside India

7 min read

GST is a destination based tax. This means GST is levied at the time of consumption and not at the time of origin. Thus, the liability to pay tax arises at the time of supply and the place of supply under GST.

Further, the type of tax to be levied depends upon the nature of supply under GST. This means both CGST and SGST are levied if the supply is done within a particular State (intra-state supply). Whereas, IGST is levied if the supply is done between two different States (inter-state supply).

Hence, GST law lays down certain provisions with regards to the following areas in order to implement the tax effectively:

  • place of supply of goods
  • time of supply
  • place of supply of services, where location of supplier and recipient is in India
  • value of supply
  • place of supply of services, where location of supplier and recipient is outside India

In this article, we are going to discuss the provisions related to the place of supply of services. Provided the location of supplier and the recipient of services is outside India. Section 13 of the IGST Act deals with these provisions. Therefore, following are the provisions covered under different subsections of section 13.

Section 13(2)

This section lays down general principles concerning the place of supply of services except the services specified in sub-sections (3) to (13). Thus, the place of supply of services in this case shall be the location of the recipient of services.

However, the place of supply shall be the location of the supplier of services if the location of the recipient is not available in the ordinary course of business.

Section 13(3)

This subsection deals with the provisions regarding the place of supply of the following services:

  • A supplier offers services in respect of goods made physically available to him or a person acting on his behalf by the recipient. Provided such services are supplied from a remote location electronically. Then, the place of supply in this case shall be the one where goods are situated at the time of supply of such services. Furthermore, these provisions shall not apply in cases where services are supplied in respect of goods temporarily imported into India for repairs. And after repairs such goods are exported without being put to any other use in India.
  • Services supplied to the recipient or a person acting on behalf of the recipient. Provided the recipient or the person acting on his behalf is physically present.

Thus, the place of supply in any of the above situations shall be the location where the services are actually performed.

Section 13(4)

This subsection deals with the rules relating to the place of supply of services in relation to immovable property. Now, the services that relate to an immovable property includes the following set of services:

  • Experts and estate agents supplying services with regards to the immovable property
  • A hotel, inn, guest house, club or campsite supplying accommodation
  • Grant of rights to use immovable property
  • Services for carrying out or co-ordination of construction work including that of architects or interior decorators

Therefore, the place of supply  in case of supply of services pertaining to immovable property shall be the location of the immovable property itself.

Section 13(5)

This section defines rules related to the place of supply of services supplied in case of following services:

  • Admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event
  • Organizing a celebration, conference, fair, exhibition or similar events
  • Services ancillary to such admission or organisation

Hence, the place of supply in case of the above services shall be the place where the event is actually held.

Section 13(6)

This section lays down provisions regarding the place of supply of services referred to in sub-section (3) or sub-section (4) or sub-section (5). Provided such services are supplied at more than one location including taxable territory.

So, the place of supply in the above situations shall be the taxable territory where such services are offered.

Section 13(7)

This section deals with the principles pertaining to place of supply of services referred to in sub-section (3) or sub-section (4) or sub-section (5). Provided such services are supplied in more than one State or Union territory.

So, the place of supply in the above cases shall be each of the respective States or Union territories where such services are supplied. And the value of such supplies specific to each State or Union territory shall be taken proportionately according to the terms of the contract.

However, the value of such services are determined as per the rules set in case there is no such contract.

Section 13(8)

This section lays down provisions regarding the place of supply of the following services:

A banking company or financial institution or non-banking financial company supplying services to account holders
Intermediary services
Supplying means of transport, including yachts but excluding aircrafts and vessels on hire up to a period of one month.

Thus, the place of supply in cases where above services are offered shall be the location of the supplier of services itself.

Section 13(9)

This section lays forth the rules regarding the place of supply of services transportation of goods other than by way of mail or courier. A

Accordingly, the place of supply in cases where such services are rendered shall be the place of destination of such goods.

Section 13(10)

This section deals with the rules of place of supply in respect of passenger transportation services.

Therefore, the place of supply in cases where these services are supplied shall be the place where the passenger gets on the conveyance for a continuous journey.

Section 13(11)

This subsection lays provisions regarding the place of supply of services provided on board a conveyance. Provided these services are supplied during the course of a passenger transport in operation. Furthermore, these services are intended to be wholly or substantially consumed while on board.

Accordingly, the place of supply of such a service shall be the first scheduled point of departure of that conveyance for the journey.

Section 13(12)

This section deals with the provisions of the place of supply of online information and database access or retrieval services. Thus, the place of supply  in case of such services shall be the location of the recipient of services.

Furthermore, a person receiving such services shall be deemed to be located in the taxable territory. Provided any of the following non-contradictory conditions are satisfied:

  • The address presented by the recipient of services through the internet is in the taxable territory
  • Credit card or debit card or any other card by which the recipient of services settles payment has been issued in the taxable territory
  • Billing address of the recipient of services is in the taxable territory
  • Internet protocol address of the device used by the recipient of services is in the taxable territory
  • Bank of the recipient of services in which the account used for payment is maintained is in the taxable territory
  • Country code of the subscriber identity module card used by the recipient of services is of taxable territory
  • Location of the fixed landline through which the service is received by the recipient is in the taxable territory.

Section 13(13)

This section lays down the powers of the Government under a special case. Thus, this case relates to the one where a supply of service leads to double taxation or non-taxation. So, government has the power to notify the place of supply. And the place of supply in such cases shall be the place where the service has been effectively used or enjoyed.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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