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PLACE OF SUPPLY OF GOODS OR SERVICES PART-III:-

Pradeep Jain
Place of supply rules: default to recipient location for services, with specified exceptions determining supply location. Section 10 sets the place of supply for cross-border services: default to the recipient's location, failing which the supplier's location, with key exceptions. International freight on exports to recipients outside India is not taxable. Services are treated as supplied where actually performed in cases where goods must be physically made available, where services are provided from remote locations linked to goods, or where recipient presence matters. Immovable-property services follow property location; event services follow event location; multi-location supplies use greatest-proportion or value-based allocation. Banking, financial, intermediary, and transport-hire services use supplier location; goods transport uses destination; passenger transport uses embarkation point. (AI Summary)

Sec 10: Place of supply of services where the location of the supplier or the location of the recipient is outside India

Continuing with the discussion, today we shall further discuss the section 10. The key take away points from this section are:

  1. Generally place of supply will be the place of recipient of service, if it is not available then place of supplier of service except of specified services as given in subsequent sub-sections. This is similar to the default rule applicable to domestic transactions
  2. No GST on international freight on exports provided by shipping companies to persons located outside India.
  3. In following cases place of supply of service will the place where service actually performed:
  • In respect of goods required to be made physically available by recipient to supplier.
  • In case service is provided from remote location then place of supply would be location of goods

c) In case services supplied to an individual, where physical presence of recipient /person acting on behalf of recipient

These rules are drafted on the principal of consumption. Hence even if goods are sent back outside India, GST shall be payable. Only goods received for repairs are excluded. Hence if an individual coming from outside India undertakes a haircut at a salon in India, GST shall be payable.

  1. Place of supply of service supplied directly in relation to an immovable property shall be the place where such property is located or intended to be located
  2. Event based services –place of supply will be the place where event actually held
  3. If services referred sub-section 3), (4), (5) or (6) are supplied are supplied at more than one location including in taxable territory place of supply would be the location where greatest proportion of service is supplied
  4. If services referred sub-section 3), (4), (5) or (6) are supplied in more than one State, place of supply of such services shall be taken as in proportion to the value of services so provided in each State as ascertained from the terms of the contract or on such other reasonable basis as may be prescribed in this behalf.
  5. Place of supply for following cases will be a place of Supplier:

a) Banking or financial institute

b) Intermediary service

c) Services relating to hiring of means of transport

  1. Place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods.
  2. The place of supply in respect of a passenger transportation service shall be the place where the passenger embarks on the conveyance for a continuous journey.

To be continued….

Visit us at www.capradeepjain.com and also at

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Goods and Services Tax - GST
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