Determination of type of supply(CGST,SGST/IGST) in relation to Immovable Properties

[Ramanathan Seshan]

Dear Experts,

Require your guidance with respect to determination of type of supply for the following transactions:

1. Supplier is unregistered in kerala

2. Property located in Tamil nadu

3. Recipient located in Tamil nadu (Registered)

Regards,

S Ram

[YAGAY andSUN]

In the given case, the supplier is unregistered and located in Kerala, the immovable property is situated in Tamil Nadu, and the recipient is a registered person in Tamil Nadu. The determination of the type of supply must be made by applying Section 12(3) of the Integrated Goods and Services Tax (IGST) Act, 2017.

Section 12(3) of the IGST Act clearly states that in case of services directly in relation to immovable property, including renting or leasing, the place of supply shall be the location of the immovable property, irrespective of the locations of the supplier or recipient. Accordingly, in this case, since the property is located in Tamil Nadu, the place of supply is Tamil Nadu.

Further, the recipient is also registered in Tamil Nadu. Hence, the location of the supplier (Kerala) is not relevant in determining the nature of supply when the supplier is unregistered and tax is payable under reverse charge. Since both the place of supply and the recipients location are in the same State (Tamil Nadu), the supply qualifies as an intra-State supply, and the applicable tax is CGST and SGST.

If the nature of service (such as renting of immovable property) falls under reverse charge as per Notification No. 13/2017 – Central Tax (Rate) dated 28.06.2017, the registered recipient in Tamil Nadu will be liable to pay CGST and SGST under reverse charge. There is no requirement for the unregistered supplier to obtain GST registration in this case.

[Ramanathan Seshan]

Dear Yagay and sun-sir,

Thanks for your detailed response.

[Sadanand Bulbule]

I welcome the reply cum legal position.

[Harshaditya Kabra]

For your specific scenario involving an unregistered supplier in Kerala providing services related to immovable property located in Tamil Nadu to a registered recipient in Tamil Nadu:

Supply Type: INTRA-STATE SUPPLY

GST Applicable: CGST + SGST (both in Tamil Nadu)

Tax Rate: As per applicable HSN/SAC code for the specific service

RCM Consideration: Check if the service falls under notified RCM categories

Compliance: Registered recipient may need to pay tax under RCM if applicable

The key takeaway is that Section 12(3) of IGST Act makes the location of immovable property the decisive factor, overriding the suppliers location for determining the type of GST supply.

[Ramanathan Seshan]

Dear sir,

Thanks for your detailed response.

[Shilpi Jain]

What is the supply in question?

[Ramanathan Seshan]

Dear Shilpi-mam,

Supply is renting of land and building by an unregistered person to the company.

Regards,

S Ram

AI Summary

Unregistered supplier's rental services for immovable property taxed based on property location under Section 12(3) IGST Act An unregistered supplier in Kerala provides rental services for immovable property located in Tamil Nadu to a registered recipient in Tamil Nadu. Under Section 12(3) of the IGST Act 2017, the place of supply for services related to immovable property is determined by the property's location, regardless of supplier or recipient locations. Since the property is in Tamil Nadu and the recipient is also registered in Tamil Nadu, this constitutes an intra-state supply attracting CGST and SGST rather than IGST. The registered recipient in Tamil Nadu must pay the applicable taxes under reverse charge mechanism as per relevant notifications, while the unregistered supplier is not required to obtain GST registration. The property location serves as the decisive factor overriding the supplier's location for determining GST supply type.