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GST Seminar

This seminar covers the relevance of Place of Supply (POS) under Goods & Services Tax (GST), including the jurisdiction of tax levy and interpretations of supply involving movement of goods. Case studies and examples illustrate the application of POS principles in various scenarios.

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GST Seminar

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  1. GST Seminar GOODS & SERVICES TAX MAY 11, 2017

  2. Coverage • Understanding the relevance of Place of Supply (“POS”) • Place of Supply framework under the GST regime • Supply of goods within India • Service provider (“SP”) and Service Receiver (“SR”) located in India

  3. Relevance of Place of Supply Need for Place of Supply provisions in a legislation?? Determining Jurisdiction of levy of tax ‘Origin’ based levy vis-à-vis ‘Destination’ based levy Current laws vis-à-vis place of supply principles

  4. Whom to Pay

  5. Interstate Vs. Intrastate...

  6. ...Interstate Vs. Intrastate

  7. ...Interstate Vs. Intrastate • Following shall always be considered as Inter state supplies:

  8. Place of Supply

  9. Place of supply of goods other than imports or exports

  10. POS framework for goods under GST

  11. Supply involves movement of goods • Where Supply involves movement of goods whether by: • the supplier; or • the recipient; or • any other person Place of Supply Location where movement of goods terminates for delivery to the recipient How do we interpret the term ‘Terminates for delivery’ ????

  12. Supply involves movement of goods - Illustration Sells goods to the customer (Ex-works) 1 Gujarat Pune Sells goods to the customer (FOR) 2 Gujarat Transaction 1: Movement of goods terminates at Pune. Customer takes delivery ex-works – POS – Maharashtra (CGST+SGST) Transaction 2: Movement of goods terminates at Gujarat. Delivery is on the factory owner – POS – Gujarat (IGST)

  13. Issues Credit of CGST / SGST in case of ex works delivery terms Who will generate E way bill in case of ex works delivery terms?? Every registered person who causes movement of delivery shall generate E way bill. In case of ex works contracts transportation is arranged by the buyer.

  14. Delivery by supplier on direction of a third person • Where the goods are delivered by the supplier to a recipient (before or during the movement); • On direction of third person (agent or otherwise) • By way of transfer of documents or otherwise Place of Supply Principal place of business of the third person • Person issuing the direction to be considered for the Place of supply; • ‘Bill to Ship to’ Model, Place of supply shall be the person to whom the bill is raised; • No concept of in-transit sales;

  15. Place of Supply –Bill to Ship to Bill to Manufacturer Trader 1 Maharashtra 2 Ship to Madhya Pradesh customer Transaction 1: On the direction of the trader, manufacturer delivers the goods – POS – Maharashtra (CGST+SGST) Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule – Delivery terms Ex- works POS – Maharashtra (CGST + SGST) Delivery terms FOR POS – Madhya Pradesh (IGST)

  16. Place of Supply –Bill to Ship to Manufacturer 1 Maharashtra Ship to Bill to Madhya Pradesh Trader Customer 2 Transaction 1: On the direction of the trader, manufacturer delivers the goods – POS – Madhya Pradesh (IGST) Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule –POS – Madhya Pradesh (CGST + SGST)

  17. Place of Supply –Bill to Ship to Manufacturer Customer Ship to 1 Maharashtra Bill to 2 Madhya Pradesh Trader Transaction 1: On the direction of the trader, manufacturer delivers the goods – POS – Madhya Pradesh (IGST) Transaction 2: Normal Sale transaction. POS would be decided in terms of general rule –Delivery terms Ex- works POS – Madhya Pradesh (CGST + SGST) Delivery terms FOR POS – Maharashtra (IGST)

  18. Supply does not involve movement of goods • Supply does not involve movement of goods by the supplier or the recipient Place of Supply Location of good at the time of delivery Sells property including the furniture Scrap generated at job worker’s premises and sold to job worker by the principal Mumbai Gujarat POS – Mumbai (being the location of goods at time of supply) - CGST+SGST

  19. Goods are assembled or installed at site... • Where goods are assembled or installed at site Place of Supply Location of installation or assembly Raises Invoice for supply and installation of Air Conditioner Mumbai Mumbai Installs Air Conditioner Rajasthan POS – Rajasthan (location of installation) - IGST

  20. .... Goods are assembled or installed at site

  21. Goods supplied on board a conveyance Where Goods supplied onboard a conveyance, including vessel, aircraft or train or motor vehicle Place of Supply Location of goods taken on board Sells a watch onboard USA Frankfurt Mumbai POS – Mumbai • Location of supplier?? – HO of the Airline company??

  22. Place of supply of services where service provider and service receiver is located in India

  23. POS framework for services under GST where location of SS and SR is in India

  24. General Rule Location of the supplier of service POS Location of the recipient of service

  25. Location of Service Recipient [Section 2(15) of IGST]

  26. Immovable Property Related Service... Coverage Services ancillary to these

  27. …Immovable Property Related Service... Place of Supply: Property located in India Location of property Place of Supply Architect services Hotel located Delhi Mumbai Bangalore Bangalore Property located outside India Location of recipient Place of Supply Architect services Hotel located Delhi Mumbai New York Mumbai

  28. …Immovable Property Related Service If immovable property is located in more than one State, or Union Territory Place of supply shall be each respective States or Union Territory in proportion to value of services provided as mentioned in the contract as entered Single Road Construction Contract for construction 1000 k.m. road between Maharashtra and Gujarat Mumbai (Service Provider) Delhi (Service Receiver) 600 k.m. of road to be constructed in Maharashtra and balance in Gujarat POS – 40% value in Gujarat POS – 60% value in Maharashtra

  29. Performance Based Service... Coverage Place of Supply: The section specifically lists these five services and applies to only these services There is no use of ‘includes’ or ‘means and includes’ or ‘in relation to’ which expands the scope of the section No use of word ‘physical presence’ as under current Rule 4(b) of Place of Provision Location where services are actually performed

  30. ...Performance Based Service - Illustration Delhi Mumbai Teaching Yoga to Employees Head Office Yoga Instructor Delhi Pune Chennai Branch Branch Branch Place of Supply of Service for Yoga Instructor shall be location of various branches What if consolidated invoice is raised in favour of HO?? Will HO require to cross charge it to branch?? Valuation and apportionment of yoga services between branches??

  31. Training & Performance Appraisal Service Coverage : Place of Supply: Deviation from current provision where POS is where the services are actually performed Services provided Registered Person Unregistered Person Location of registered person Location where service is actually performed

  32. Admission to An Event Coverage Place of Supply: Any Services ancillary thereto Current Rule 6 of POPOS deals with admission as well as organizing of an event Location where the event is actually held; Or such park or place is located

  33. Admission to An Event - Illustration Organises event in USA Music event in USA Pune Office Sales tickets to various persons USA Chennai Pune POS – USA No Tax POS – USA No Tax POS – USA No Tax

  34. Organising An Event Coverage: Place of supply: Ancillary Services, or Sponsorship to such Events Services provided Registered Person Other than registered person Location of registered person Event held in India Location of event Event held outside India Location of recipient

  35. Transportation of Goods... Coverage Place of Supply Transportation Services Registered Person Other than registered person Location of registered person Location at which goods are handed over for transportation

  36. ...Transportation of Goods- Illustration Factory - Pune Registered Trader Mumbai Delhi Chennai Unregistered Trader Registered Trader POS -Chennai Tax - IGST POS - Mumbai Tax – CGST+SGST POS -Pune Tax – CGST+SGST

  37. Passenger Transportation Service... Coverage Place of Supply: Services provided Registered Person Other than registered person Location of registered person Point of embarkation known Location of embarkation Point of embarkation not known for future journey Apply General Rule

  38. ...Passenger Transportation Service -Illustration Pune Bangalore Registered in Delhi Unregistered POS = Delhi POS = Pune Note: Return Journey shall be treated as a separate journey, even if right to passage for onward and return journey are issued at the same time

  39. On-board Service... Coverage : Supply of service on board a conveyance, including: • Vessel; • An aircraft; • A train; or • Motor vehicle Place of supply Location of first scheduled point of departure

  40. ...On-board Service - Illustration POS = Pune Unregistered Registered in Delhi

  41. Telecommunication Service Telecom Services Fixed Line Mobile Connection Place of Installation Post Paid Pre Paid Address on Record of Customer Online Voucher Physical Voucher Address on Record of Customer Place of Sale of Voucher/ Receipt

  42. Banking and Financial Service... Coverage Place of Supply: • Currently, in terms of Rule 9,place of supply is Service provider as place of provision of service • Under GST the place of supply for banking and financial has been shifted to location of receiver (if address on record) Address of recipient of service On records of supplier Not on records of supplier Location of recipient Location of supplier

  43. ...Banking and Financial Service - Illustration Maharashtra Demand Draft Service Loan procured for Tamil Nadu Plant Registered in Gujarat Registered in Tamil Nadu non-account holder of the Bank POS – Maharashtra Tax – CGST+SGST POS – Tamil Nadu Tax – IGST

  44. Insurance Service... Coverage Place of Supply: Service provided Registered person Other than registered person Location of recipient on records of insurance company Location of registered person

  45. Insurance Service - Illustration Maharashtra Insurance Service Insurance Service Customer registered in Gujarat Unregistered person located in Karnataka POS – Gujarat Tax – IGST POS – Maharashtra Tax – CGST+SGST

  46. Advertisement services to Government Coverage Place of Supply: Meant for the States or Union Territories Each respective States or Union Territories in proportion to amount attributable to services provided as determined in the contract as entered

  47. THANK YOU!

  48. Disclaimer: The information provided in this presentation is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This presentation is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned herein.

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