Place of supply, within state, interstate, import and export, time of supply

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Place and Time of Supply under GST

Under the GST framework in India, determining the place and time of supply is crucial for applying the correct type of tax. There are three types of taxes: SGST (State GST) and CGST (Central GST) for intra-state transactions, and IGST (Integrated GST) for inter-state transactions. The complexity arises in distinguishing between intra-state and inter-state transactions, especially in cases of services provided online or goods sold across multiple states.

Time of Supply

Definition: The point in time when goods or services are considered supplied. It determines the due date for tax payment.

Time of Supply for Goods

The time of supply of goods is determined by the earliest of the following dates:

  • Date of issue of invoice: This is the date when the supplier issues an invoice for the goods.
  • Last date on which invoice should have been issued: As per GST rules, the invoice should be issued either before or at the time of:
    • Removal of goods for supply to the recipient, if the supply involves movement of goods.
    • Delivery of goods or making goods available to the recipient, in other cases.
  • Date of receipt of advance/payment: If an advance payment is received before the issuance of an invoice, the date of receipt of payment becomes the time of supply.

Time of Supply for Services

The time of supply of services is determined by the earliest of the following dates:

  • Date of issue of invoice: This is the date when the supplier issues an invoice for the services.
  • Date of receipt of advance/payment: If an advance payment is received before the issuance of an invoice, the date of receipt of payment becomes the time of supply.
  • Date of provision of services: If the invoice is not issued within the prescribed period (usually 30 days from the date of provision of service), the date when the services are provided becomes the time of supply.

Place of Supply

Definition: Determines the right tax (IGST or CGST/SGST) to be charged on the invoice based on the location of the supply.

Place of Supply of Goods

  • General Rule: The place of supply of goods is where the goods are delivered, i.e., the place where the ownership of goods changes.
  • No Movement of Goods: If there is no movement of goods (e.g., goods are supplied at the supplier’s place), the place of supply is the location of goods at the time of delivery to the recipient.

Place of Supply for Services

  • General Rule: The place of supply of services is the location of the service recipient.
  • Unregistered Dealer: If services are provided to an unregistered dealer and their location is not available, the place of supply is the location of the service provider.

Special Provisions for Services

Certain services have specific rules to determine the place of supply:

  • Services related to immovable property: The place of supply is where the property is located.
  • Restaurant services: The place of supply is where the service is actually performed.
  • Admission to events: The place of supply is where the event is held.
  • Transportation of goods and passengers: The place of supply is where the goods or passengers are boarded.
  • Telecom services: The place of supply is the billing address of the recipient.
  • Banking, Financial, and Insurance services: The place of supply is the location of the service recipient if available; otherwise, it is the location of the supplier.

Examples

  • Intra-state Transaction:
    • Location of Service Receiver: Maharashtra
    • Place of Supply: Maharashtra
    • Nature of Supply: Intra-state
    • GST Applicable: CGST + SGST
  • Inter-state Transaction:
    • Location of Service Receiver: Maharashtra
    • Place of Supply: Bihar
    • Nature of Supply: Inter-state
    • GST Applicable: IGST

Understanding these rules ensures accurate tax application and compliance with GST regulations. The place of supply rules are particularly significant in complex scenarios like online services, temporary accommodation services, and transportation services.