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 goods | Place of supply | GST |
| Imported into India | The location of the importer | IGST |
| Exported from India | The location outside India | Zero 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 SERVICES | PLACE OF SUPPLY | EXAMPLE |
| Performance based service | Place where actually performed | |
| Temporarily imported goods into India for repair and are exported back without being used in India | Location of recipient | Goods sent from USA for repair and after repair gain sent back to USA. Place of supply – USA |
| Services supplied directly in relation to immovable property | Place where the immovable property is located | |
| Services supplied by way of admission to or organization of event | The 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
| SUPPLY | PLACE OF SUPPLY |
| Banking, intermediary and hiring means of transport | The location of the supplier |
| Services of transportation of goods other than mail | The place of destination of such goods |
| Passenger transportation goods | The place where the passenger embarks on conveyance |
| The place of supply of online information and database access | The location of recipient of services |
| OIDR to the recipient for personal use | GST 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