Type of GST to be applied

[Kaustubh Karandikar]

XYZ(Maharashtra) sold Control Panels to PQR(Maharashtra) by charging CGST + SGST. These panels were subsequently sold by PQR to ABC (Goa). Further, XYZ had done the installation of the panel at the Goa site of ABC on behalf of PQR and charged CGST + SGST to PQR in the service invoice towards installation. Is it correct or they should have charged IGST since the services were performed outside Maharashtra?

[DR.MARIAPPAN GOVINDARAJAN]

In my view IGST is not applicable.

[Kaustubh Karandikar]

Thanks for your reply. But in my view, it may fall under Section 10(d) of IGST Act, 2017 as per which the place of supply of goods where the goods are assembled or installed at site, shall be the place of such installation or assembly. Since the installation is done at Goa, IGST needs to be charged. Expert's views please.

[Alkesh Jani]

Sir, the query raised by you requires more clarity, as the installation at the site of ABC was part of P.O. given by PQR to XYZ? or the instruction was given afterwards.

Thanks

With Regards

[KASTURI SETHI]

Dear Sir,

In my view, it is inter-State supply of service and covered under Section 12(2)(a) of IGST Act, 2017. XYZ provided/supply of service only (of installation). Supply of goods already terminated. IGST is applicable.

Regarding the supply of goods, it is pertinent to go through para no.4 the following circular:-

Supply of goods on approval basis within the States or in another State - Guidelines

C.B.E. & C. Circular No. 10/10/2017-GST, dated 18-10-2017

CBEC - 20/16/03/2017-GST

AI Summary

Place of supply rules determine IGST applicability for installation services performed outside the supplier's state, altering tax charge.
Whether installation performed outside the supplier's State is subject to IGST hinges on place of supply rules: the place for goods assembled or installed is the installation location and the place for services is where the installation is performed, both analyses supporting IGST for an out of State installation; an alternative view contests IGST applicability and administrative guidance on approval basis goods is noted.