Clarification regarding determination of place of supply in case of software/design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry

Place of supply: software and design services using sample hardware treated at recipient's location when testing is ancillary.

Where testing of software/design on prototype hardware supplied by the recipient is ancillary to a composite supply of chip design/software development, the activity is an ancillary part of a single supply and the place of supply is the location of the service recipient under the IGST place-of-supply rule. The rule concerning goods made physically available by the recipient does not separately determine place of supply for such ancillary testing; the contractual facts must be examined without artificially separating the composite supply.