GST Place of Supply FAQs

GST Place of Supply FAQs

IndiaFilings has helped tens of thousands of Entrepreneurs with their GST queries and concerns. In this article, we have featured some of the FAQs we received from Entrepreneurs concerning the place of supply. Before going through the following FAQs, we request you to read our guides on the place of supply for goods and services to get a firm understanding of the concepts involved.

What is place of supply?

The basic principle of GST is that GST should be levied at the point of consumption. As per the GST Rules, the supplier can determine the Point of consumption as the place of supply provision. Hence, the place of supply determines whether a transaction is intra-state or inter-state, the applicability of IGST or CGST and SGST and the state which receives the GST paid by the taxpayer.

What factors determine the place of supply?

The following factors shall apply for determining the place of supply:

  • Location of the supplier;
  • Location of the recipient.
  • Place where the supplier delivers the goods.
  • Place where the activity takes place/ place of performance.
  • Place where it is consumed.
  • Place/ person to which actual benefit flows

Is there a difference between the place of supply for B2B and B2C supplies?

In respect of B2B transactions, the taxes paid shall act as credit by the recipient hence, such transactions are just pass through. GST collected on B2B supplies effectively create a liability for the government and an asset for the recipient of such supplies. Hence, the recipient can use the input tax credit for payment of future taxes. For B2B transactions the location of the recipient shall apply in almost all the situations when the recipient requires additional credit. The recipient usually furthers the supplies to another customer. Thus only when the concerned individual converts the B2B transaction into B2C transaction the supply shall apply as consumed.

In respect of B2C transactions, the supply is finally consumed and the taxes paid actually come to the government.

What will be the place of supply if the goods are delivered by a supplier to a person on the direction of a third person?

In this scenario, the place of supply of goods received shall act as the principal place of business of such person who received the goods and it shall also consider that the third person has received the goods.

What will be the place of supply where the goods or services supplied on board a train, aircraft or vehicle?

In respect of goods supplied on board a vehicle, the place of supply will be the location at which the goods were taken on board. In case of supply of services, the place of supply will be the location of the first scheduled point of departure of that conveyance for the journey.

What is the default place of supply in respect of B2B supply?

Since the recipient is registered, the address of recipient is always there and the principal place of business of recipient listed on the GST registration can be taken as a proxy for place of supply.

What is the default presumption for place of supply for B2C supply?

For supply to unregistered recipients, the place of supply is usually the location of the recipient. If the address of the recipient is not available, the location of the supplier can be taken place of supply.

What will be the place of supply of goods services sent through mail or courier?

In case of domestic mail or courier: For registered recipients, the location of the recipient shall apply as the place of supply. However, for unregistered recipients, the place of supply shall apply as the place where the goods produced to the recipient for transportation.

For international supply through mail or courier: The place of supply of transport services, other than the courier services, will be the destination of goods. For courier, the place of supply of services shall act as the place where the courier receives the goods. However, if the courier performs the even partially in India, the place of supply shall act as goods delivered in India.

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