1. PRACTICAL ISSUES Place and time of supply
AUGUST 2017

2. 500 Representations/AARs 50 Action pact days at office
5000 FAQs/ Tweets
50 Action pact days at office
50,000 Cr tax collection
5 Laws
5,00,000WhatsApp msgs
50 days of GST

3. RELEVANCE OF PLACE OF SUPPLY
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
Type of Transactions
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
Deciding Parameters
Location of the Supplier
Place of Supply

6. Place of supply of goods

7. SUPPLY INVOLVING MOVEMENT OF GOODS…
PLACE OF SUPPLY WITH/ WITHOUT MOVEMENT OF GOODS
SUPPLY INVOLVES MOVEMENT OF GOODS (EITHER BY SUPPLIER OR RECIPIENT OR BY ANY OTHER PERSON)
SUPPLY DOES NOT INVOLVE MOVEMENT OF GOODS
Location of goods at the time where movement of goods terminates for delivery to recipient
Location of such goods at the time of the delivery to the recipient

8. …SUPPLY INVOLVING MOVEMENT OF GOODS
Sells goods to the customer (Ex-works)
Workshop
Factory Gate
PUNE
GUJARAT
POSITION ADOPTED
PLACE OF SUPPLY
APPLICABLE TAXES
Ex-factory
(No movement contemplated outside the State)
Pune
CGST+ SGST
Movement terminates at buyers premises
Gujarat
IGST
ISSUES IN CASE OF EX-WORKS
Whether there is movement of goods?? If yes, whether it terminates at factory gate of the supplier??
Who will generate E way bill in case of ex- works delivery terms?? Who will give the acceptance of receipt of goods??

9. PLACE OF SUPPLY – BILL TO SHIP TO
When on direction of a ‘third person’
Goods delivered by supplier to a recipient
Place of Supply is principal place of business of such ‘third person’
Company A - Supplier (U.P.)
Ship to
Bill to
Company B - Branch Office (Punjab)
Company B - Head Office (U.P.)
Third person not defined under the Act
ISSUE IN CASE OF BILL TO – SHIP TO
Whether ‘third person’ includes ‘Distinct Persons’ ?
Section 25(5) : “Distinct Persons” means establishments of a person in same/different States/Union Territories for which separate registration is obtained

10. BILL TO SHIP TO - ISSUE Ship to
Supplier of goods
Mr. A
Ship to
Maharashtra
Maharashtra
“export of goods” with its grammatical variations and cognate expressions,
means taking goods out of India to a place outside India
India
Direction
Bill to
USA
Mr.A
ISSUE IN CASE OF BILL TO – SHIP TO
Place of supply of goods in the instant case is USA. Whether this transaction can be construed as ‘export of goods’ even though goods haven’t moved out of India ?

11. PLACE OF SUPPLY - INSTALLATION
Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly
Installation of Goods involving movement
Installation of goods resulting into ‘Immovable Property’
It would be works contract – which would be treated as ‘Service’
The same shall be taxed as per ‘Place of supply of Service ’
Installation of goods not resulting into ‘Immovable Property’
It would be a ‘Composite Supply’ and taxed as per principal supply
In case the principal supply is goods which clause shall be applicable

12. Place of supply of services

13. LOCATION OF SUPPLIER OF ‘SERVICE’
Where supply is made from…
Then the location of…
a place of business for which registration has been obtained
place of business
a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere,
such fixed establishment
More than one establishment, whether the place of business or fixed establishment
the establishment most directly concerned with the provision of the supply
in absence of such places
the usual place of residence of the supplier
ISSUE IN CASE OF LOCATION OF SUPPLIER
Location of supplier of ‘Goods’ not defined
What constitutes a ‘fixed establishment’ ?

14. LOCATION OF RECEIPIENT OF ‘SERVICE’
Where supply is received at ...
Then the location of…
a place of business for which registration has been obtained
place of business
a place other than the place of business for which registration has been obtained, that is to say, a fixed establishment elsewhere,
such fixed establishment
More than one establishment, whether the place of business or fixed establishment
the establishment most directly concerned with the receipt of the supply
in absence of such places
the usual place of residence of the supplier

15. FIXED ESTABLISHMENT
The concept of fixed establishment under GST law to mean:
‘unregistered’ places of business fulfilling following conditions:
1. Sufficient degree of permanence; and
2. Suitable structure in terms of:
Human and Technical resources for supply or receipt of services
ISSUES IN CASE OF FIXED ESTABLISHMENT
What is the yardstick for measuring ‘permanence’ - whether it is months, 6 months or a year?
What is meant by ‘suitable structure’ in terms of human and technical resources

16. CASE STUDY – MULTIPLE ESTABLISHMENTS
Mumbai
Delhi
Company A gives a contract from its Head office for hardware maintenance of its branches located in 2 states
Company A Head Office
Company B Head Office
Company B provides these services from its
Head office and two branches located in 2 states
Delhi
Jaipur
Jaipur
Mumbai
Branch
Branch
Branch
Branch
Whether the location of the service recipient is company A’s head office or each of its branch offices ?
Whether the location of the service provider is the head office of company B and/or its two regional offices ?

17. ‘LOCATION OF RECIPIENT OF SERVICE’ V/S ‘RECIPIENT’ – CASE STUDY
‘Recipient’ of supply of services/goods means [sec 2(93)]:-
Consideration payable - Person liable to pay consideration
No consideration payable(Service) - Person to whom service is rendered
No consideration payable(Goods) - Person to whom goods are delivered
Service
Provider
Company A
Branch
IT Service
INDIA
‘Export of Services’ means when :-
the supplier of service is located in India
the recipient of service is located outside India
the place of supply is outside India
Payment received in Forex
Not establishments of distinct persons
USA
Company A
Head Office
Raises PO &
pays in Forex

18. IMMOVABLE PROPERTY RELATED SERVICE
Directly in relation to immovable Property services provided by
Architects, Interior decorator , Surveyor, Engineers and other experts, Grant of right to use immovable property, Carrying out co-ordination of construction work and other ancillary service
Property / Boat / Vessel are located in India
POS – location of the immovable property
Property / Boat / Vessel are located outside India
POS – location of service recipient (if both recipient and supplier are in India)
By way of lodging and accommodation by:
Lodging accommodation by a hotel, Inns, Guesthouse, Home stay, Club or campsite including: House boat or any other vessel;
Accommodation in any immovable property for organising any function; and
Other ancillary service

19. IMMOVABLE PROPERTY – ISSUE I
What 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 or on reasonable basis
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

20. IMMOVABLE PROPERTY – ISSUE II
Whether landlord/tenant of immovable property has to take registration in the state where the immovable property is located ?
Case I Case II
Registered in Gujarat
Property in Rajasthan
Unregistered Person
Property in Rajasthan
Leasing
Leasing
The landlord is unregistered and has leased out a property in Rajasthan to a tenant registered in various states (other than Rajasthan) - whether registration to be obtained in Rajasthan by the tenant liable to pay tax under reverse charge ?
The landlord registered in Gujarat has leased out a property in Rajasthan to a tenant registered in Rajasthan - whether registration to be obtained in Rajasthan or he can pay IGST from Gujarat?

21. PLACE OF SUPPLY - REGISTRATION
Employee of Co. A
Facts of the case :-
Employee stays in an unregistered hotel in Punjab for a business meeting. Liable to pay GST under RCM.
Company A (Karnataka)
Unregistered Hotel (Punjab)
ISSUES IN SUCH SCENARIOS
Place of Supply being Punjab, CGST + SGST will be liable ?
Will the Company be liable to take registration in the State of Punjab for discharging its tax liability?
Availability of credit and its utilization goes for a toss!

22. PERFORMANCE BASED SERVICE
Coverage
Nature of Service
Restaurant and catering
Personal grooming
Fitness
Beauty treatment
Health service (including cosmetic and plastic surgery)
The section specifically lists these five services and applies to only these services
Place of Supply
Location where services are actually performed

23. PERFORMANCE BASED SERVICE – ISSUE I
Supplies catering service
Caterer registered in Gujarat
Mr.X's function in Rajasthan
ISSUE IN CASE OF PEFORMANCE BASED SERVICE
Whether the caterer registered in Gujarat has to register in Rajasthan i.e. in the State from where he is supplying such services ?

24. TIME OF SUPPLY

25. ISSUES IN SUCH SCENARIO
REAL ESTATE
Supply in GST regime,
say flat worth Rs. 2 crores
Property
Amount is collected in advance on which VAT & ST is paid by the builder
Builder
Flat Buyer
ISSUES IN SUCH SCENARIO
On the transition day, say only 70% of the construction is complete. As per the law, on the 30% of the advance received, GST will be payable.
Sec 142 (11)(c) – Credit can be taken of the VAT and Service tax paid on such amount.
Balance needs to be paid as per the rates under GST. Who will bear the burden?

26. ISSUES IN SUCH SCENARIO
ADVANCES
Supplier of Goods/Services
Recipient of Goods/Services
Pays advance
Rate and Nature of supply is not known
If at the time of receipt of advance :
Rate of tax is not known – Pay 18%
Nature of supply is not known – treat as Inter State supply
ISSUES IN SUCH SCENARIO
Advance receipt – whether towards goods or services?
Treatment of the tax paid on advance received, in case of variation in the rates at the time of actual supply
Actual supply is Intra-State , whether IGST can be adjusted against CGST+SGST liability or to be claimed as refund??
Whether Interest is applicable??

27. TIME OF SUPPLY – PARTIAL REVERSE CHARGE
Scenario
Service
Prior to GST (June)
Invoice
Payment
In GST regime (July)
ASSOCIATED ISSUES
No partial reverse charge under GST regime.
As a service provider, rent-a-cab service operator charged service tax on 50% of taxable value when abetment is not claimed
Whether GST payable on partial reverse charge liability?
On the balance portion i.e. 50%, Service tax liability under reverse charge mechanism for the Company - point of taxation being the date of payment.
Whether the Company should pay under RCM? If yes, whether GST or Service tax?

28. CONTINUOUS SUPPLY OF GOODS
Supplies Raw materials
on daily basis – Example iron ore
ISSUES IN SUCH SCENARIO
Is invoice to be issued on daily basis ?
In the case where debit note / credit note is required to be issued, references of multiple invoices – a procedural bottleneck
Can this be treated as continuous supply of goods?

29. OCEAN FREIGHT – DOUBLE TAXATION
INDIA
CHINA
IGST is to be paid by the importer on ocean freight services availed from foreign freight forwarder under RCM basis.
Supplies Goods
Exporter
Transportation service up to Port
Importer
In determining transaction value of imported goods, cost of transport is to be included as per Rule 10 of Customs Valuation Rules.
Foreign Freight Forwarder
ISSUE IN CASE OF OCEAN FREIGHT CHARGES
Double taxation on Ocean freight – IGST and Customs Duty??

31. THANK YOU!

32. 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.