Overview of IGST and Place of Supply Provisions

1. Overview of IGST and Place of Supply Provisions Changes -Addition and deletions in the final IGST Laws K.SRINIVASAN Assistant COMMISSIONER CHENNAI ZONE

2. PRESENTATION PLAN • Overview of IGST Act • Major changes in the Final IGST Act over the Draft Model GST Laws • Amendments in Customs Act, 1962 w.r.t GST • Compensation Cess • Focus: Changes and new additions in the Final law and the Rules

3. Definitions • Section 2(13): “intermediary” • means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account • Securities are neither goods nor services; Brokers of securities subjected to GST

4. Taxable Territory • Section 2(22) “taxable territory” • means the territory to which the provisions of this Act apply; • Jammu & Kashmir will be treated as Non-Taxable Territory

5. Ch.II ( Administration) • Section 3: The Board may appoint such central tax officers as it thinks fit for exercising the powers under this Act. • Section 4: Authorisation of certain officers • Officers appointed under the SGST Act or the UTGST Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify.

6. Levy and collection • Section 5(1) • Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962

7. Procurement from unregistered supplier • Section 5(4) • The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

8. Section 7- Nature of supply • Inter-state Supply of goods or services • where the location of the supplier and the place of supply are in–– (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of goods in the course of inter-State trade or commerce. • Imports

9. Section 7 (Contd) • (5) Supply of goods or services or both,–– • (a) when the supplier is located in India and the place of supply is outside India; • (b) to or by a SEZ developer or a SEZ unit; or • (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

10. Section 8- Intra state Supply • Following shall not be intra-state supplies • Supplies ( Goods or services) from and to SEZs • Goods( Not services) imported till they cross customs frontiers of India • Supplies of goods ( NOT Services )made to a tourist referred to in section 15

11. Supplies in territorial waters • Section 9- Supplies in territorial waters • where the location of the supplier is in the territorial waters, the location of such supplier; or • where the place of supply is in the territorial waters, the place of supply, shall, for the purposes of this Act, • be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

12. Refund to tourists • Section 15: Refund of integrated tax paid on supply of goods( Not services) to tourist leaving India • The integrated tax paid by tourist leaving India on any supply of goods taken out of India by him shall be refunded in such manner and subject to such conditions and safeguards as may be prescribed.

13. Zero Rated Supply • Section 16(2) • Subject to the provisions of sub-section (5) of section 17 of the CGST Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. • What happens if non-taxable supply • No Credit

14. Zero Rated Supply • Section 16(1) • (1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–– • (a) export of goods or services or both; or • (b) supply of goods or services or both to a SEZ developer /unit.

15. Supplies to SEZs • Supply to SEZ Developer / Unit is treated at par with physical exports and the same will be treated as Zero rated Supply and will not attract IGST under the bond / Letter of Undertaking or pay the IGST under the claim of refund

16. Zero Rated Supply • Section 16(2) • Subject to the provisions of sub-section (5) of section 17 of the CGST Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. • What happens if non-taxable supply • No Credit

17. Apportionment of tax • Section 17(1)- Apportionment of tax and settlement of funds. • Out of integrated tax paid to the Central Govt • Supplies to unregistered persons • Supplies to person registered but opting for composition scheme • Supplies to registered person who is not eligible for ITC/ do not avail ITC • Imports by unregistered person

18. Settlement Commission • Chapter on Settlement Commission • Earlier only in IGST Act • Not in SGST Act • Now omitted altogether

19. Export /Import of goods- IGST Act Section 2(5) “export of goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India; Section 2(10) “import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India;

20. Sec. 2(6) -Export of Services means the supply of any service when the supplier of service is located in India, (b) the recipient of service is located outside India, (c) the place of supply of service is outside India, (d) the payment for such service has been received by the supplier of service in convertible foreign exchange, and (e) the supplier of service and recipient of service are not merely establishments of a distinct person in accordance with explanation 1 of section 5;

21. Sec. 2(11) “import of service” means the supply of any service, where • the supplier of service is located outside India, (b) the recipient of service is located in India, and (c) the place of supply of service is in India;

22. Place of Supply Separate POS provisions for domestic and international supplies

23. POS of goods in case of Import or Export Import Location of the importer. Export Location outside India. Section 11. Place of supply of goods imported into, or exported from India (1) The place of supply of goods imported into India shall be the location of the importer. (2) The place of supply of goods exported from India shall be the location outside India.

24. Place of supply of services in case of Export or Import Section 13. Place of supply of services where the location of the supplier orthe location of the recipient is outside India

25. Specific Provisions for 9 services. Default rule for the Rest of the Services. Import/export

26. Specific Provisions for 9 services imported /exported • services supplied in respect of goods/Individual • Immovable property related services, • Admission to or organisation of an event . • Banking, financial institutions, NBFC Intermediary, hiring of vehicles services etc • Transportation of goods. • Passenger transportation. • Services on board a conveyance . • OIDAR services • Insurance services

27. Default Rule for the import /export of Services other than Nine Specified Services

28. 13(3) Services in respect of goods/individual • Services supplied in respect of goods that are required to be made physically available from a remote location by way of electronic means, NA in case of goods that are temporarily imported into India for repairs and exported. (b) services supplied to an individual which require the physical presence of the receiver the location where the services are actually performed, the location where goods are situated the location where the services are actually performed,

29. 13(4) Immovable property related • Services supplied directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts etc • grant of rights to use immovable property . • lodging accommodation by a hotel, inn, Boat, GH. • Coordination of construction work Location at which the immovable property is located.

30. 13 (5) Admission to or organisation of an event services supplied by way of admission to, or organization of, a cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be The place where the event is actually held.

31. If the said three services supplied at more than one location 13 (6) at more than one location, including a location in the taxable territory, • its place of supply shall be the location in the taxable territory where the greatest proportion of the service is provided. 13 (7) in more than one State - prorata

32. 13 (8) Banking , intermediary services etc (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) intermediary services; (c) services consisting of hiring of means of transport other than aircrafts and vessels except yachts, up to a period of one month. Location of the supplier of service

33. 13(9) Goods Transportation Services of transportation of goods, other than by way of mail or courier,. The place of destination of the goods

34. 13(10) Passenger transportation Passenger transportation service Place where the passenger embarks on the conveyance for a continuous journey:

35. 13(11) On Board a conveyance Services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board The first scheduled point of departure of that conveyance for the journey.

36. OIDAR SERVICES

37. Online information database access and retrieval services • Defined as any service whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology. • Advertising on the internet • Providing cloud services • Provision of e-books, movie, music, software and other intangibles via telecommunication networks or internet • Providing data or information, retrievable or otherwise, to any person in electronic form through a computer network • Online supplies of digital content (movies, tv shows, music etc) • Digital data storage • Online gaming

38. What is not an OIDAR Service ? • Telecoms and broadcasting services • Physical goods where the ordering is done by the internet or e-mail • DVDs, CD-ROMs, CDs, memory sticks etc for information, games or books • Professional advice given via e-mail or the internet • Designing covers or contents for eBooks, brochures and other literature • Live teaching provided over the internet • Offline data services • Tickets bought for live events, theaters, restaurants etc. purchased through the internet

39. 13(12): OIDAR Services “online information and database access or retrieval services” services The location of recipient of service. Import of services- B2B? B2C? Non-taxable online recipient?

40. (20) “non-taxable online recipient” means • Government, a local authority, a governmental authority, • an individual or • any person not registered under section 23 of the CGST Act, 2016 • receiving online information and database access or retrieval services • in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory;

41. Location of ‘non-taxable online recipient’ Deemed to be in the taxable territory if any of the two is in the taxable territory : address shown by the recipient; the credit card or debit card etc the billing address IP address; the bank a/c of recipient used for payment; the country code of the SIM card used (vii) the location of the fixed land line

42. OIDAR Services • Section 14: Special provision for payment of tax by a supplier of online information and database access or retrieval services. • The supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services • Supplier may register under Simplified Registration Scheme or appoint representative

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