Place of Supply Under GST Explained
GST is a destination-based tax, meaning that the goods/services are taxed at the point of consumption rather than the point of origin. So that state would have the authority to collect GST where they are consumed. As a result, the place of supply is essential under GST because it is the focal point of all its requirements. The GST place of supply determines whether a transaction qualifies as intrastate or interstate and, as a result, how much SGST, CGST, and IGST will be levied. Therefore, cross-checking a supplier’s place using the GST search tool is recommended.
Sections Under Place of Supply
The location of the place of supply is determined according to sections 10, 11, 12, and 13 of the IGST acts.
- IGST Section 7 addresses interstate supply: Per section 7, supplies used in interstate trade or commerce must be treated.
| Supply | Terms For Supply To Be Treated as the supply of Goods or Services in the course of inter-state trade or commerce |
| Supply of goods or services | Subject to the provisions of Section 10 or Section 12 for the supply of goods or services, respectively, where the provider and the site of delivery are located in:Two different statesTwo different Union territoriesA state and a Union territory |
| Imports | Until they cross the Indian border’s customs line, supplies of goods or services brought into India |
| Export and Sez | When a supplier is located in India and the place of supply is outside India. Provide services to or on behalf of a special economic zone developer or special economic zone unit,ORSupply made within the taxable area is neither an intra-state supply nor covered by another provision of this section. |
- The IGST’s Section 8 addresses intra-state supply.- According to section 8 following supplies shall be treated as intra-state supplies.
| Supply | Terms For Supply To Be Treated as a supply of Goods or Services As Intra-State Supply |
| Supply of goods or services | When the supplier and the place of supply are in the same state or union territory, the supply of products or the supply of services is handled as an intra-state supply, subject to the provisions of sections 10 and 12, respectively. |
| Goods supplied shall not be considered an intra-state supply. | The following commodities supply will not be considered an intra-state supply:The provision of commodities to or by a special economic zone unit.Items are brought into India until they pass through the country’s customs borders.Goods given to a tourist are defined in section 15 |
| Services provided shall not be considered an intra-state supply. | The provision of services to or by a particular economic zone developer or a special economic zone unit is not considered an intra-state supply of services. |
- Section 10 – A location where goods are supplied other than those imported into or exported from India.
- Section 11 – The location where products imported into or exported from India are supplied.
- Section 12 – Place of supply of services where the location of supplier and recipient is in India
- Section 13 – Place of supply of services where the location of supplier or recipient is outside India
Place Of Supply When There Is a Movement of Goods
| Supply Type | Place Of Supply |
| Involves the movement of goods, whether by the supplier or buyer or by any other person | Location of the goods when the recipient is reached and the movement of the goods has ended. |
| Before or during the transportation of the goods, by way of a transfer of title in the goods or documentation, or in some other manner, goods are handed by the seller to the buyer in the direction of the third party (whether or not an agent). | The third party will supply the products in their primary location of business since it is considered that they have already received the goods. |
Place Of Supply When There Is No Movement of Goods
| Supply Type | Place of Supply |
| No movement of goods, either by the supplier or by the recipient | The places where those things were when they were delivered to the receiver (at the time of transfer of ownership) |
| Goods are assembled or assigned at the site | Place of installation or assembly |
Place Of Supply-Goods Supplied On a Vessel/Conveyance
| Supply Type | Place Of Supply |
| Goods are on board a conveyance, vessel, train, aircraft, or motor vehicle. | Location at which such goods are taken on board |
Imports and Exports under Place of Supply
The place of supply of goods:
- The importer’s location will be imported into India.
- Location outside of India must be specified as being exported from India.
| Supply Type | Place Of Supply | GST |
| Products imported into India | Where is the importer located | IGST is always applied to imports. |
| Exported from India | Location outside India | GST on exports is eligible for a refund |
Additionally, anytime an Indian company issues a foreign currency invoice. GST can be charged in other currencies, but you’ll need to provide the INR translation rate and IN values.
If you raised money in US dollars (USD), you might also charge GST in USD. Additionally, you must provide the invoice value in INR and the USD to INR conversion ratio.
To conclude, you can use a GST accounting software such as Busy Accounting Software, to manage all your GST related tasks seamlessly.
