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Understanding Place of Supply-1

Determining the Place of Supply of goods or services is very important as it determines the nature of the tax to be paid. In case, when the location of the supplier and place of supply are in the same state, CGST and SGST will be levied, whereas if the place of supply is in a different state, then IGST will be levied. Which tax is to be levied (IGST or CGST and SGST/UTGST) depends on whether a particular transaction is an Inter-state supply or Intra-state supply. Hence, every transaction has to go through the test of provisions relating to the place of supply in order to determine which tax is to be levied.

Nature of Transaction

Place of supply of goods

Services provided to the registered person

Location of the person

Provided to someone other than the registered person

  • Location of the recipient where the address on record exists
  • Other cases-location of the supplier
  1. Services in relation to immovable property including ancillary services
  2. Lodging accommodation by hotel, inn, club, guest house etc.
  3. Accommodation of any immovable property for organizing any event

E.g. Marriage, reception or related

Where the immovable property is located or intended to be located

Restaurant and catering, fitness, beauty treatment, health, and plastic surgery

Location where the services are actually performed

Services in relation to training and performance appraisal

  • Registered person- location of such a person
  • Other than the registered person- where services are actually performed

Admission to any event

E.g. Cultural, educational, entertainment, artistic, sports etc.

Location where the event is actually held

Organizing of cultural, artistic, educational, scientific events, including services in relation to conferences, fairs, exhibitions, and  celebrations

  • Registered person- location of such a person
  • Other than the registered person- where services are actually performed
  • When the event is held in more than one state for the consolidated price, it will be based on the proportion of the value of services provided in the state

Services in relation to training and performance appraisal     

  • Registered person-location of such a person
  • Other than the registered person- where services are actually performed

Admission to any event

E.g., Cultural, educational, entertainment, artistic, sport etc.

Location where the event is actually held

Organizing cultural, artistic, educational, scientific events, including services in relation to conference, fair, exhibition, and celebration

  • Registered person-location of such a person
  • Other than the registered person-where services are actually performed
  • When an event is held in more than one state for a consolidated price, based on proportion to the value of services provided in the state

Transportation of goods including mail or courier 

  • Registered person–location of such a person
  • Other than the registered persons – location at which goods are handed over for their transportation

Passenger transportation services

  • Registered person–location of such a person
  • Other than reg. person place where the passenger embarks on the conveyance for a continuous journey

Services onboard a vessel, aircraft, motor car, and train

Location of the first scheduled point of departure for the journey

Banking and other financial services, including stock broking services

  • Location of the recipient of service on record of the service provider
  • Service is not linked to the account of the recipient-location of the service provider

Insurance services 

  • Registered person-location of such a person
  • Other than the registered person-location of the recipient of services on record of the supplier

Advertisement services to:

  • Central/State Govt.
  • Statutory body
  • Local authority

Location where the services are provided

If the consolidated price is more than one state on a proportionate basis