What is POS under GST?

Place of Supply (POS) under GST determines the tax jurisdiction for a transaction. It identifies where a supply is considered to take place, affecting the type and rate of GST applied.

Is ITC restricted due to POS rules?

Yes, Input Tax Credit (ITC) may be restricted if the place of supply and the recipient's location are in different states or jurisdictions, as some inter-state transactions are not eligible for ITC.

Which supply is exempt from GST?

Exports and certain specified goods and services are generally exempt from GST. Additionally, supplies to Special Economic Zones (SEZs) may also be treated as zero-rated, meaning no GST applies.

How does the place of supply affect GST?

The place of supply affects the type of GST applied—Central GST (CGST) and State GST (SGST) for intra-state, or Integrated GST (IGST) for inter-state transactions. Proper determination ensures accurate tax application.

Concept of Place of Supply under Gst Explained Rules

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.

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Time Place and Value of Supply

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 Section 10 (goods) or Section 12 (services), where the provider and the site of delivery are located in: Two different states / Two different Union territories / A state and a Union territory
Imports	Himachal Pradesh
Export and SEZ	When a supplier is located in India and the place of supply is outside India / Supply to SEZ developer or unit / Supply within taxable area but not intra-state

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 supplier and place of supply are in the same state or union territory, subject to Sections 10 & 12
Goods supplied shall not be considered an intra-state supply	Supply to/by SEZ unit, Items brought into India before customs clearance, Goods supplied to tourists (Section 15)
Services provided shall not be considered an intra-state supply	Services to/by SEZ developer or SEZ unit

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 (by supplier, buyer, or any other person)	Location of goods when recipient is reached and movement has ended
Transfer before/during transport (title transfer or documentation, via seller to third party)	Third party’s principal place of business

Place Of Supply When There Is No Movement of Goods

Supply Type	Place Of Supply
No movement of goods (by supplier or recipient)	Location of goods at time of delivery/transfer of ownership
Goods assembled/installed at site	Place of installation or assembly

Place Of Supply-Goods Supplied On a Vessel/Conveyance

Supply Type	Place Of Supply
Goods on board vessel, train, aircraft, or motor vehicle	Location at which 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	Importer’s location	IGST is always applied to imports
Products exported from India	Location outside India	Exports are zero-rated (eligible for 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.

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Place of Supply – Imports and Exports

Place of supply meaning in the context of imports and exports, determining the place of supply is crucial for calculating GST correctly. When goods are imported into India, the place of supply is always considered to be India, regardless of the country of origin. This is because goods are consumed within the country, making India the place of supply. Importers need to pay Integrated Goods and Services Tax (IGST) on these goods at the time of import, which they can later claim as input tax credit to offset their GST liabilities.

For exports, the situation is different. Goods or services supplied from India to another country are considered exports, and the place of supply is treated as outside India. Exports are zero-rated under GST, which means they are not subject to tax, but exporters can claim a refund on the taxes paid for inputs. This provision supports Indian exporters by reducing their tax burden and improving their competitiveness in the global market.

Madan Murari

Chartered Accountant

MRN No.: 509164

City: Patna

Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!

Frequently Asked Questions

What is POS under GST?

Place of Supply (POS) under GST determines the tax jurisdiction for a transaction. It identifies where a supply is considered to take place, affecting the type and rate of GST applied.
Is ITC restricted due to POS rules?

Yes, Input Tax Credit (ITC) may be restricted if the place of supply and the recipient's location are in different states or jurisdictions, as some inter-state transactions are not eligible for ITC.
Which supply is exempt from GST?

Exports and certain specified goods and services are generally exempt from GST. Additionally, supplies to Special Economic Zones (SEZs) may also be treated as zero-rated, meaning no GST applies.
How does the place of supply affect GST?

The place of supply affects the type of GST applied—Central GST (CGST) and State GST (SGST) for intra-state, or Integrated GST (IGST) for inter-state transactions. Proper determination ensures accurate tax application.

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