PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    Edited by: Vaani Garg

    PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    NATURE OF SUPPLY: PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    Good and Services Tax envisages two types of supply intra state and interstate. Place of Supply define whether a given transaction is interstate or intra- state supply. The tax or taxes payable are different in each case. For example, IGST is payable for interstate supply and CGST + SGST is payable for intrastate supply,

    PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    Treatment of Imports Goods / Services

    GST law states that import of goods into India will be liable for Custom duty and IGST as per the provision of Custom Act. Whereas import of service is liable for IGST only under reverse charge as per the IGST Act.

    Treatment of Export or Supply to Special Economic Zone unit

    Under GST law export are treated as zero rated supplies. Export shall always be considered as Zero rated whether rate of goods or services are said 0 % or 28%. This mean that in case of export and supplies to SEZ no tax is charged but refund of input tax credit is allowed

    PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    PLACE OF SUPPLY OF GOODS IN CASE OF IMPORT AND EXPORT {SECTION 11}

    The place of supply of goodsPlace of supplyGST
    Imported into IndiaThe location of the importerIGST
    Exported from IndiaThe location outside IndiaZero rated supply

    Illustration 1

    Ms. Ruchika imports school bags from China for her shop (registered in kolkata).

    Place of supply: Kolkata

    GST: IGST

    Illustration 2

    Ms. Ritika (Kolkata) exports Indian  shoes to UK.

    Place of supply: UK

    PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    PLACE OF SUPPLY OF SERVICES FOR CROSS BORDER SUPPLIES {SECTION 13}

    This section deal with the place of supply of services the parties is outside India. The general rule in case of supply of services is outside India – the location of the recipient of services. However, if location of recipient is not available in the ordinary course of business. then the location of supplier.

    IMPORT /EXPORT OF SPECIFIC SERVICES

    NATURE OF SERVICESPLACE OF SUPPLYEXAMPLE
    Performance based servicePlace where actually performed 
    Temporarily imported goods into India for repair and are exported back without being used in IndiaLocation of recipientGoods sent from USA for repair and after repair gain sent back to USA. Place of supply – USA  
    Services supplied directly in relation to immovable propertyPlace where the immovable property is located 
    Services supplied by way of admission to or organization of eventThe place where event is actually held 

    It is important to note that the above service provided in more than one country including India – the place of supply shall be India, however if provided in more than one state then each state as per proportionate value as per contract. The recipient pays gst under reverse charge mechanism in case of import of service

    PLACE OF SUPPLY IN CASE OF IMPORT AND EXPORT

    OTHER SERVICES

                SUPPLYPLACE OF SUPPLY
    Banking, intermediary and hiring means of transportThe location of the supplier
    Services of transportation of goods  other than mailThe place of destination of such goods
    Passenger transportation goodsThe place where the passenger embarks on conveyance
    The place of supply of online information and database accessThe location of recipient of services
    OIDR to the recipient for personal useGST paid under forward charge

    For instance

    • If Mr Rishabh from US visits Delhi & goes to CANARA BANK. Then in such a case, the place of supply will be Delhi, and CGST & SGST will be applicable to such service.
    • The Dubai Emirates flies passengers from Delhi to Dubai via Rajasthan. Mr ajay is touring from Delhi to Dubai. Then in such a case, the place of supply will be Delhi (Place where the passenger embark on conveyance), and CGST & SGST will be applicable to such services