1. GST on Cross border supplies
Optitax’s
GST on Cross border supplies
10 May 2017

2. Content Place of supply of Goods & Services – Cross Border
Optitax’s 1
Place of supply of Goods & Services – Cross Border 2
Import, Export including High Seas, Deemed Export, etc.
Implications in transition to GST 3

3. “passing, occurring, or performed
Background
Optitax’s
Cross border?
Oxford dictionary
“passing, occurring, or performed
across a border between two countries”
Common parlance
“Import and Export”
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4. Before understanding the implications of GST and place of supply w. r
Before understanding the implications of GST and place of supply w.r.t. cross border transactions, we need to consider the legal framework of GST
Supply of goods or services or both would be governed by the SGST/UTGST/CGST/IGST Act
In terms of Section 2(109) of the CGST Act, 2017 (CGST Act), taxable territory means the territory to which the provisions of this Act apply
In terms of Section 1(2) of the CGST Act & IGST Act, this Act extends to the whole of India except the State of Jammu and Kashmir
Background
Optitax’s
Term
Meaning
Territory of India,
Its territorial waters (up to 12 nautical miles),
Seabed & sub-soil underlying such waters,
Continental shelf,
Exclusive economic zone (up to 200 nautical miles) or any other maritime zone – Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976, and
Air space above its territory and territorial waters
India
12 nm
Land/Baseline
200 nm
India
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5. Location of the importer Location outside India
In terms of provisio (ii) to Section 8 of IGST Act, the supply of imported goods till they cross customs frontiers of India shall not be treated as intra State supply of goods
In terms of provisio to Section 5 of the IGST Act:
goods imported into India shall be subject to IGST in accordance to Section 3 of Customs Tariff Act, 1975
goods cleared from Customs bonded warehouse shall be subject to IGST
Cross border transactions - Goods
Optitax’s
In terms of Section 16 of the IGST Act, exports shall be zero-rated including supplies to SEZ
Import
Bringing goods into India from a place outside India
Export
Taking goods out of India to a place outside India
Location of the importer
Location outside India
Place of Supply
Import
Export
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6. Implications under GST
HSS is a sale carried out while the goods are yet on high seas or after their dispatch from the port of origin and before it crosses the customs frontier
High Seas Sale shall be treated as an inter-State supply and thus, IGST payable
IGST paid by the tourist leaving India on any supply of goods taken out of India by him shall be refunded to him subject to conditions & safeguards as may be prescribed
Terrorist means a person not normally resident in India who enters
Cross border transactions - Goods (High Seas, Outbound tourists)
Optitax’s
Implications under GST
High Seas Sale (HSS)
Outbound tourists
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7. In terms of Section 2(39) & 147 of the CGST Act, certain supplies of goods will be deemed exports where goods (manufactured in India) do not leave India & the payment for such supplies is received either in Indian rupees or in convertible foreign exchange. However, deemed exports have not been notified by the Government yet
Manufacture is defined under Section 2(72) of CGST Act, means processing of raw material or inputs in any manner that results in emergence of new product having a distinct name, character and use
Thus, we look into Chapter 7 of the FTP where provisions w.r.t. deemed exports are explained
Deemed exports - Goods
Optitax’s
Deemed exports
Sl. No.
Categories
Benefits available under the present FTP regime
Implications under GST regime 1
Supply of goods by a manufacturer to:
EOU
STP
Exemption from Terminal Excise Duty if goods procured by a unit in DTA (basis supplies shall be made directly)
What exactly will be notified is pursued by Ministry of Commerce 2
Supply of goods by a manufacturer against Advance Authorisation/DFIA
Duty free procurement 3
Supply of capital goods against EPCG Authorisation
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8. Import of services Location of Supplier Outside India
Cross border transactions - Services
Optitax’s
Import of services
Location of Supplier
Outside India
Location of recipient
In India
Place of supply
In India
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9. Not merely establishment of distinct person
Cross border transactions - Services
Optitax’s
Export of services
Location of Supplier
In India
Location of recipient
Outside India
Place of supply
Outside India
Payment
In convertible FE
Supplier & recipient
Not merely establishment of distinct person
© 2016 Optitax’s, an Indian Limited Liability Partnership Firm. All rights reserved.

10. Location of recipient of services Location of recipient of services
Place of supply – Cross border (1/2)
Location of recipient of services
Location of recipient of services
Optitax’s
Import
Export
Services
(Default/Residuary)
Place of supply of services where location of supplier or location of recipient is outside India w.r.t. specific events is explained in the subsequent slide
© 2016 Optitax’s, an Indian Limited Liability Partnership Firm. All rights reserved.

11. Place of supply – Cross border (2/2)
Optitax’s
Place of supply of services where location of supplier or location of recipient is outside India – Section 13 of the IGST Act 2017
Sl. No.
Service
Place of supply 1
Services provided in respect of goods that are required to be made physically available by recipient to the supplier in order to provide the service
Location where the services are actually performed 2
Place of supply of services provided to an individual either as recipient of service or person acting on behalf of the recipient of service requiring physical presence of the receiver or person acting on behalf of the recipient 3
Directly in relation to immovable property including services supplied by experts, supply of accommodation by a hotel, inn, etc.
location at which immovable property is located or intended to be located 4
Admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition, or similar events and services ancillary to such event
Place where the event is actually held 5
Services supplied by banking company or a FI or NBFI to account holders
Intermediary services
Services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month
Location of the supplier of services 6
Transportation of goods other than by way of mail or courier
Place of destination of goods 7
Passenger transportation service
Place where the passenger embarks on a conveyance for a continuous journey 8
Services on board a conveyance during the course of passenger transportation including services consumed wholly or substantially on board
First scheduled point of departure of that conveyance for the journey 9
Online information and data access and retrieval services
Location of the recipient of services
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12. Implications on transition to GST
Optitax’s
Advance received prior to 1 July 2017 but invoice to be raised post 1 July 2017
Determination of Place of Supply ?
Advance received for goods
Determination of Place of Supply whether relevant ?
Advance paid for import of goods
Under the present Indirect tax regime, considered as Works contract services
What under the GS regime – Composite supply or not ?
Taxability of composite supply is basis the determination of principal supply
Determine the principal supply in respect of goods or services & accordingly, determine the place of supply
Works Contract Services
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13. Any questions ? Questions Optitax’s
© 2016 Optitax’s, an Indian Limited Liability Partnership Firm. All rights reserved.

14. CA Raveendra Pethe 9823010562 Thank You Thank you
Optitax’s
Thank You
CA Raveendra Pethe
Office address: C-26/11, Ketan Heights, Near Rahul Nagar, Kothrud, Pune
Ph. No.: /
Website:
© 2016 Optitax’s, an Indian Limited Liability Partnership Firm. All rights reserved.