Under GST we have 2 sets of taxes:
- CGST & SGST/UTGST
Place of supply and Location of supplier determines applicable taxes to be charged. CGST and SGST/UGST is charged when both place of supply and location of the supplier is in the same state otherwise IGST is charged.
In this article, we will cover the concept of the place of supply of Goods under GST for various situations.
|Section No.||Transaction||Place of Supply of Goods|
|10(1)(a)||Where the supply involves movement of goods||Location of delivery of the goods to the recipient
[see example 1]
|10(1)(b)||Where goods are delivered by the supplier to a recipient or any other person on the direction of a 3rd person||The principal place of business of 3rd person
[see example 2]
|10(1)(c)||Where the supply does not involve movement of goods||The location of such goods at the time of the delivery to the recipient
[see example 3]
|10(1)(d)||Where the goods are assembled or installed at the site||The place of such installation or assembly
[see example 4]
|10(1)(e)||Where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle||The location at which such goods are taken on board
[see example 5]
|11(a)||Where goods are Imported into India||Location of the importer
[see example 6]
|11(b)||Where goods are Exported From India||Location outside India
[see example 7]
Example 1: u/s 10(1)(a) of IGST Act, 2017
Meteorio, an Electronic Store, of Kolkata sells 5 TV to XYZ Ltd of Patna. In This case place of supply is in Patna. Therefore, Meteorio has to issue an invoice to XYZ Ltd charging IGST (inter-state Supply).
Example 2: u/s 10(1)(b) of IGST Act, 2017
Meteorio, an Electronic store, of Kolkata, sells 5 TV to XYZ Ltd of Patna. These TVs are to be sent to XYZ Ltd by a Meteorio’s Store in Patna. In this case, the recipient is XYZ Ltd (Patna) and 3rd party is Meteorio (Kolkata).
It involves 2 transactions, 1st between Meteorio of Kolkata and XYZ Ltd of Patna and 2nd between Meteorio of Kolkata and Meteorio of Patna.
For Kolkata’s Store, place of supply is Patna, the location of delivery of the goods to the XYZ Ltd (recipient). Therefore Kolkata’s Store will issue an invoice in the name of XYZ Ltd and charge IGST (inter-state supply). [u/s 10(1)(a) of IGST Act, 2017]
For Patna’s Store, place of supply is Kolkata, the principal place of business of 3rd party. Therefore Patna’s Store will issue an invoice in the name of Kolkata’s Store and charge IGST (inter-state supply). [u/s 10(1)(b) of IGST Act, 2017]
Example 3: u/s 10(1)(c) of IGST Act, 2017
Meteorio, an Electronic store, of Kolkata, sells 1 TV to Mr.Ram. The buyer (Mr.Ram) took the delivery of TV at the store only. As far as Meteorio is concerned, the supply of TV doesn’t involve movement. Therefore the place of supply will be Kolkata store.
Example 4: u/s 10(1)(d) of IGST Act, 2017
Meteorio, an Electronic store, of Kolkata, purchase an Escalator from X Ltd to be installed in Kolkata’s store. In this case, place of supply is Kolkata being the place of Escalator’s installation.
Example 5: u/s 10(1)(e) of IGST Act, 2017
Mr.Ram is traveling to Patna on a train. The train starts at Kolkata (irrelevant). He boards at Ranchi Station (irrelevant). He immediately purchases a bottle of water. This bottle was taken on board (train) at Asansol (relevant). In this case, place of supply is Asansol being location at which water bottle was taken on board.
Example 6: u/s 11(a) of IGST Act, 2017
Mr. Ram, of Kolkata, purchases an I-Phone from China. In this case, Place of supply is in Kolkata. Mr. Ram has to pay IGST.
Example 7: u/s 11(b) of IGST Act, 2017
Mr. Ram, of Kolkata, Exports rice to Africa. In this case, Place of supply is Africa being the place outside India. Mr. Ram is not required to pay GST because exports are generally exempted. However, in few cases, Exports are charged to GST and later on the taxes are refunded on the fulfillment of specified conditions.
Source: IGST Act, 2017