Under GST, the ‘Supply’ is a fundamental concept and all the provisions of GST revolves around it. Under Supply, there are three key elements namely time of supply, place of supply and value of supply.
These three elements together determine the chargeability of taxes on supply. In this article we will be covering the concept of ‘Place Of Supply’
‘Place of Supply’ under GST is an important factor as it defines whether the transaction will be counted as intra-state(i.e within the same state) or inter-state(i.e. between two states) and accordingly the changeability of tax, i.e levy of SGST, CGST & IGST will be determined.
While determining the levy of taxes based on Place of Supply, two things are considered namely:
Location of Supplier: It is the registered place of business of the supplier
Place Of Supply: It is the registered place of business of the recipient
Let’s understand this with the help of two examples!
Determining Place of Supply for Intra-State Supply of Goods
Let us assume there is a supplier of craft products, Kloud Kreations Pvt. ltd having the registered office in Bangalore, Karnataka. It supplies goods to schools in Manipal, Karnataka. Here since the supplier as well as the recipient are located in same state i.e Karnataka, it will be counted as ‘Intra-State Supply Of Goods’ and hence SGST & CGST will be levied.
When there is intra state supply of goods, SGST & CGST are levied.
Determining Place of Supply for Inter-State Supply of Goods
Let us assume the supplier of craft products, Kloud Kreations Pvt. Ltd is having the registered office in Bangalore, Karnataka and the recipient i.e Delhi Public School is located in Jaipur, Rajasthan. Here since the supplier and the recipient are located in different states i.e Karnataka and Rajasthan, it will be counted as ‘Inter-State Supply Of Goods’ and hence IGST will be levied.
In case of inter-state supply of goods IGST is levied
There are specific provisions for determination of place of supply of goods such as:
Also, there are specific provisions for determining the place of supply of services. We will cover all the above specific cases in detail in the next series of articles and will try to understand the same using help of illustrations.