*Place of supply rules for Goods*
1) Where the supply involves a movement of goods, the place of supply shall be determined by the location of the goods at the time of final delivery.
For e.g. A manufacturer in Kolkata, West Bengal, has an order from a customer in Surat, Gujarat. The manufacturer directs his branch in Mumbai, Maharashtra to ship the goods to Surat. In this case, place of supply shall be Surat, Gujarat and thus entails an inter-state movement of goods and will attract levy of IGST.
2) Where the supply involves a movement of goods, on the direction of a third party, whether as an agent or otherwise, the place of supply shall be the principle place of business of such third party, irrespective of the place of delivery of goods.
For e.g. A dealer in Mumbai, Maharashtra sells products to a customer in Delhi. Delhi-based customer directs the Mumbai seller to send the materials to Kolkata-based customer. Although the place of delivery is Kolkata, since Delhi-based seller had directed such movement, then the place of supply shall be the principle place of business, i.e. Delhi and thus, charge IGST on such movement.
3) Where the supply does not involve any movement of goods, then place of supply shall be the location of such goods at the time of final delivery.
For e.g. A Ltd has its registered office in Hyderabad, Telangana, opens a branch in Bengaluru, Karnataka, and purchases workstations from B Ltd. Whose office is in Bengaluru, Karnataka. Even though the same is, a supply of goods but there is no movement of goods. Since the movement is intra-state, it will attract CGST and SGST.
4) Where the supply includes installation of goods at site, then place of supply shall be the place of such installation.
For e.g. Installation of telephone towers or lift in an office building.
5) Where the goods are being supplied on board a vehicle, vessel, aircraft, or a train, i.e. on board a conveyance, then place of supply shall be the first location at which the goods are boarded.
For e.g. Howrah to New Delhi Rajdhani starts its journey from Howrah, West Bengal and passes through many states before ending its journey in New Delhi. The food served on board the train shall be considered as supply of goods. Thus, place of supply shall be Howrah since it is the first location of the goods.
6) Any other cases not covered above will be determined further as per recommendations from the GST council (yet to be finalised)
The above rules are defined for goods. The place of supply of services is separate and specific in nature. They go as follows.
0 comments: