1. GOODS & SERVICES TAX MAY 11, 2017
GST Seminar
GOODS & SERVICES TAX
MAY 11, 2017

2. Coverage Understanding the relevance of Place of Supply (“POS”)
Place of Supply framework under the GST regime
Supply of goods within India
Service provider (“SP”) and Service Receiver (“SR”) located in India

3. Relevance of Place of Supply
Need for Place of Supply provisions in a legislation??
Determining Jurisdiction of levy of tax
‘Origin’ based levy vis-à-vis ‘Destination’ based levy
Current laws vis-à-vis place of supply principles
Taxes
Levy
Place of supply
Principle
Value Added Tax
Sale of goods
Place of Movement
Origin based tax
Central Sales Tax
Central Excise duty
Manufacture of goods
Place of Removal
Service tax
Provision of service
Place of Recipient
Destination based tax

4. Taxes to be levied on Supply of Goods / Services
Whom to Pay
Taxes to be levied on Supply of Goods / Services
Intra State
CGST + SGST
Inter State
IGST
Import
Export including supplies to SEZ Developer and SEZ Unit
Zero Rated

5. Interstate Vs. Intrastate...
Intra State supplies
Where the location of the supplier and the place of supply are in the same state or same union territory
Inter State supplies
Where the location of the supplier and the place of supply are in different states or union territories

6. ...Interstate Vs. Intrastate
Deciding Parameters
Location of the Supplier
Place of Supply

7. ...Interstate Vs. Intrastate
Following shall always be considered as Inter state supplies:
Supply of goods imported into the territory of India till they cross the custom frontiers of India
Supply of services imported into the territory of India
Supplier is located in India and the place of supply is outside India i.e. export
Supply to or by a Special Economic Zone unit / developer

8. Either SP or SR outside India
Place of Supply
Goods
Imports and Exports
DTA Transactions
Services
Either SP or SR outside India
SP and SR in India

9. Place of supply of goods other than imports or exports

10. POS framework for goods under GST
Sr. No.
Scenario
Section under the IGST Act 1
Supply involving movement of goods
10(1)(a) 2
Goods delivered on the direction of a third person
10(1)(b) 3
Supply does not involve movement of goods
10(1)(c) 4
Goods are assembled or installed at site
10(1)(d) 5
Goods supplied on board a conveyance
10(1)(e) 6
Residuary Rule
10(2)

11. Supply involves movement of goods
Where Supply involves movement of goods whether by:
the supplier; or
the recipient; or
any other person
Place of Supply
Location where movement of goods terminates for delivery to the recipient
How do we interpret the term ‘Terminates for delivery’ ????

12. Supply involves movement of goods - Illustration
Sells goods to the customer (Ex-works) 1
Gujarat
Pune
Sells goods to the customer (FOR) 2
Gujarat
Transaction 1: Movement of goods terminates at Pune. Customer takes delivery ex-works
– POS – Maharashtra (CGST+SGST)
Transaction 2: Movement of goods terminates at Gujarat. Delivery is on the factory owner
– POS – Gujarat (IGST)

13. Issues Credit of CGST / SGST in case of ex works delivery terms
Inter State Supplies
Place of supply and location of supplier in different states
Ex works
Movement of goods terminates at the location of supplier
CGST / SGST
Credit of CGST / SGST not available unless buyer is registered in that state
Who will generate E way bill in case of ex works delivery terms??
Every registered person who causes movement of delivery shall generate E way bill. In case of ex works contracts transportation is arranged by the buyer.

14. Delivery by supplier on direction of a third person
Where the goods are delivered by the supplier to a recipient (before or during the movement);
On direction of third person (agent or otherwise)
By way of transfer of documents or otherwise
Place of Supply
Principal place of business of the third person
Person issuing the direction to be considered for the Place of supply;
‘Bill to Ship to’ Model, Place of supply shall be the person to whom the bill is raised;
No concept of in-transit sales;

15. Place of Supply –Bill to Ship to
Manufacturer
Trader 1
Maharashtra 2
Ship to
Madhya Pradesh
customer
Transaction 1: On the direction of the trader, manufacturer delivers the goods
– POS – Maharashtra (CGST+SGST)
Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule
– Delivery terms Ex- works POS – Maharashtra (CGST + SGST)
Delivery terms FOR POS – Madhya Pradesh (IGST)

16. Place of Supply –Bill to Ship to
Manufacturer 1
Maharashtra
Ship to
Bill to
Madhya Pradesh
Customer
Trader 2
Transaction 1: On the direction of the trader, manufacturer delivers the goods
– POS – Madhya Pradesh (IGST)
Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule
–POS – Madhya Pradesh (CGST + SGST)

17. Place of Supply –Bill to Ship to
Manufacturer
Ship to
Customer 1
Maharashtra
Bill to 2
Madhya Pradesh
Trader
Transaction 1: On the direction of the trader, manufacturer delivers the goods
– POS – Madhya Pradesh (IGST)
Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule
–Delivery terms Ex- works POS – Madhya Pradesh (CGST + SGST)
Delivery terms FOR POS – Maharashtra (IGST)

18. Supply does not involve movement of goods
Supply does not involve movement of goods by the supplier or the recipient
Place of Supply
Location of good at the time of delivery
Sells property including the furniture
Scrap generated at job worker’s premises and sold to job worker by the principal
Mumbai
Gujarat
POS – Mumbai (being the location of goods at time of supply) - CGST+SGST

19. Goods are assembled or installed at site...
Where goods are assembled or installed at site
Place of Supply
Location of installation or assembly
Raises Invoice for supply and installation of Air Conditioner
Mumbai
Mumbai
Installs Air Conditioner
Rajasthan
POS – Rajasthan (location of installation) - IGST

20. .... Goods are assembled or installed at site
Supply involves movement of goods
Goods are assembled or installed at site and involves movement from one state to another
Which clause would be applicable??
Installation resulting into immovable property
If Installation of goods resulting in immovable property – it is works contract
Works contract is defined as ‘service’
In such cases, place of supply with respect to services shall apply

21. Goods supplied on board a conveyance
Where Goods supplied onboard a conveyance, including vessel, aircraft or train or motor vehicle
Place of Supply
Location of goods taken on board
Sells a watch onboard
USA
Frankfurt
Mumbai
POS – Mumbai
Location of supplier?? – HO of the Airline company??

22. Place of supply of services where service provider and service receiver is located in India

23. Section under the IGST Act
POS framework for services under GST where location of SS and SR is in India
Sr. No.
Concept
Section under the IGST Act 1
General Rule
12(2) 2
Services directly in relation to an immovable property
12(3) 3
Restaurant and catering services, personal grooming, fitness, beauty treatment, health services including cosmetic and plastic surgery
12(4) 4
Services in relation to training and performance appraisal
12(5) 5
Services provided by way of admission to various events, amusement park or any other place and ancillary services
12(6) 6
Services provided by way of organising various events and ancillary services
12(7) 7
Services by way of transportation of goods, including courier or mail
12(8) 8
Passenger Transport Service
12(9) 9
Services supplied on board a conveyance
12(10) 10
Supply of telecommunication services including data transfer, broadcasting, cable and D2h service
12(11) 11
Banking and other financial services, including stock brokering services
12(12) 12
Insurance Service
12(13) 13
Advertisement services provided to the CG, SG, statutory authority or local authority
12(14)

24. General Rule Location of the recipient of service
Location of the supplier of service
Available
Not available in the ordinary course of business
POS

25. Location of Service Recipient
[Section 2(15) of IGST]
Supply is received at a place of business for which registration is obtained
Location of registered place of business
Supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere)
Location of fixed establishment
Supply is received at more than one establishment, whether the place of business or fixed establishment
Location of establishment which is directly concerned with the receipt of supply
In absence of such places
Location of usual place of residence

26. Immovable Property Related Service...
Coverage
Directly in relation to immovable Property and includes services provided by:
Architects, Interior decorators,
Surveyors, Engineers and other experts
Estate agents
Grant of right to use immovable property
Carrying out co-ordination of construction work
By way of lodging and accommodation by:
Hotels, Inns, Guesthouse,
Home stay, Club or campsite
Including: House boat or any other vessel
By way of accommodation for organizing:
Marriage or reception
Official, Social, Cultural, Religious or business functions
And includes: Services provided in relation to such functions
Services ancillary to these

27. …Immovable Property Related Service...
Place of Supply:
Property located in India
Location of property
Place of Supply
Architect
services
Hotel located
Delhi
Mumbai
Bangalore
Bangalore
Property located outside India
Location of recipient
Place of Supply
Architect
services
Hotel located
Delhi
Mumbai
New York
Mumbai

28. …Immovable Property Related Service
If immovable property is located in more than one State, or Union Territory
Place of supply shall be each respective States or Union Territory in proportion to value of services provided as mentioned in the contract as entered
Single Road Construction Contract for construction 1000 k.m. road between Maharashtra and Gujarat
Mumbai
(Service Provider)
Delhi
(Service Receiver)
600 k.m. of road to be constructed in Maharashtra and balance in Gujarat
POS – 40% value in Gujarat
POS – 60% value in Maharashtra

29. Performance Based Service...
Coverage Place of Supply:
The section specifically lists these five services and applies to only these services
There is no use of ‘includes’ or ‘means and includes’ or ‘in relation to’ which expands the scope of the section
No use of word ‘physical presence’ as under current Rule 4(b) of Place of Provision
Nature of Service
Restaurant and catering
Personal grooming
Fitness
Beauty treatment
Health service (including cosmetic and plastic surgery)
Location where services are actually performed

30. ...Performance Based Service - Illustration
Delhi
Mumbai
Teaching Yoga to Employees
Head Office
Yoga Instructor
Delhi
Chennai
Pune
Branch
Branch
Branch
Place of Supply of Service for Yoga Instructor shall be location of various branches
What if consolidated invoice is raised in favour of HO??
Will HO require to cross charge it to branch??
Valuation and apportionment of yoga services between branches??

31. Training & Performance Appraisal Service
Coverage : Place of Supply:
Deviation from current provision where POS is where the services are actually performed
Services in relation to: - Training; and - Performance appraisal
Services provided
Registered Person
Unregistered Person
Location of registered person
Location where service is actually performed

32. Any Services ancillary thereto
Admission to An Event
Coverage Place of Supply:
Service by way of admission
Cultural event
Artistic event
Sporting event
Scientific event
Educational event
Entertainment event
Amusement park
Any other place
Any Services ancillary thereto
Current Rule 6 of POPOS deals with admission as well as organizing of an event
Location where the event is actually held;
Or such park or place is located

33. Admission to An Event - Illustration
Pune Office
Music event in USA
Organises event in USA
USA
Pune
Chennai
Sales tickets to various persons
POS – USA
No Tax
POS – USA
No Tax
POS – USA
No Tax

34. Organising An Event Coverage: Place of supply:
Ancillary Services, or Sponsorship to such Events
Services provided by way of organizing:
Cultural Event
Artistic event
Sporting Event
Scientific event
Educational event
Entertainment event
Including: Services in relation to conference, fair, exhibition, celebration or similar events
Services provided
Registered Person
Other than registered person
Location of registered person
Event held in India
Location of event
Event held outside India
Location of recipient

35. Transportation of Goods...
Coverage Place of Supply
Supply of Services by way of:
- Transportation of goods
(Including by way of mail or a courier)
Transportation Services
Registered Person
Other than registered person
Location of registered person
Location at which goods are handed over for transportation

36. ...Transportation of Goods- Illustration
Unregistered Trader
Registered Trader
Factory - Pune
Registered Trader
Chennai
Mumbai
Delhi
POS -Chennai
Tax - IGST
POS - Mumbai
Tax – CGST+SGST
POS -Pune
Tax – CGST+SGST

37. Passenger Transportation Service...
Coverage Place of Supply:
Passenger Transportation Service
Services provided
Registered Person
Other than registered person
Location of registered person
Point of embarkation known
Location of embarkation
Point of embarkation not known for future journey
Apply General Rule

38. ...Passenger Transportation Service -Illustration
Pune
Bangalore
Registered in Delhi
Unregistered
POS = Delhi
POS = Pune
Note: Return Journey shall be treated as a separate journey, even if right to passage for onward and return journey are issued at the same time

39. Location of first scheduled point of departure
On-board Service...
Coverage :
Supply of service on board a conveyance, including:
Vessel;
An aircraft;
A train; or
Motor vehicle
Place of supply
Location of first scheduled point of departure

40. ...On-board Service - Illustration
Pune
Delhi
Beijing
POS = Pune
Unregistered
Registered in Delhi

41. Telecommunication Service
Telecom Services
Fixed Line
Mobile Connection
Place of Installation
Post Paid
Pre Paid
Address on Record of Customer
Online Voucher
Physical Voucher
Address on Record of Customer
Place of Sale of Voucher/ Receipt

42. Banking and Financial Service...
Coverage Place of Supply:
Banking and other financial services;
(Including stock broking services)
Currently, in terms of Rule 9,place of supply is Service provider as place of provision of service
Under GST the place of supply for banking and financial has been shifted to location of receiver (if address on record)
Address of recipient of service
On records of supplier
Not on records of supplier
Location of recipient
Location of supplier

43. ...Banking and Financial Service - Illustration
Maharashtra
Demand Draft Service
Loan procured for Tamil Nadu Plant
Registered in Gujarat
Registered in Tamil Nadu
non-account holder of the Bank
POS – Maharashtra
Tax – CGST+SGST
POS – Tamil Nadu
Tax – IGST

44. Insurance Service... Coverage Place of Supply: Insurance Services
Service provided
Registered person
Other than registered person
Location of recipient on records of insurance company
Location of registered person

45. Insurance Service - Illustration
Maharashtra
Insurance Service
Insurance Service
Customer registered in Gujarat
Unregistered person located in Karnataka
POS – Gujarat
Tax – IGST
POS – Maharashtra
Tax – CGST+SGST

46. Advertisement services to Government
Coverage Place of Supply:
Advertisement services provided to
Central Government
State Government
Union Territory
Statutory body or local authorities for States or Union Territories
Meant for the States or Union Territories
Each respective States or Union Territories in proportion to amount attributable to services provided as determined in the contract as entered

47. THANK YOU!

48. Disclaimer: The information provided in this presentation is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This presentation is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned herein.