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SUB-REGIONAL CONFERENCE ON GST

Organized b y RAJKOT BRANCH OF WIRC. SUB-REGIONAL CONFERENCE ON GST. PRESENTED BY. RAJIV LUTHIA. AN INVESTMENT IN KNOWLEDGE PAYS THE BEST RETURN. COVERAGE. INTER & INTRA STATE SUPPLY PLACE OF SUPPLY & ISSUES.

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SUB-REGIONAL CONFERENCE ON GST

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  1. Organizedby RAJKOT BRANCH OF WIRC SUB-REGIONAL CONFERENCE ON GST PRESENTED BY RAJIV LUTHIA AN INVESTMENT IN KNOWLEDGE PAYS THE BEST RETURN CA Rajiv Luthia

  2. COVERAGE • INTER & INTRA STATE SUPPLY • PLACE OF SUPPLY & ISSUES CA Rajiv Luthia

  3. DEFINITION OF INTER & INTRA STATE SUPPLYandPRINCIPLES FOR DETERMINING SUPPLY CA Rajiv Luthia

  4. Place of supply • Section 2(86) of CGST Act …. “ Place of Supply” means place of supply as referred in Chapter V of IGST Act • Section 2(64) of CGST Act…. “Intra State supply of Goods” shall have meaning as assigned to in section 8 of IGST Act • Section 2(65) of CGST Act…. “Intra State supply of Service” shall have meaning as assigned to in section 8 of IGST Act” CA Rajiv Luthia

  5. Section 7 (1) & (2) - IGST - Supply of Goods in course of Inter State trade or commerce • Subject to the provisions of section 10, supply of goods, where the location of the supplier and the place of supplyare 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. • Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-Statetrade or commerce. (E.g.: High Sea Sales) CA Rajiv Luthia

  6. Definition of “INDIA” – Section 2(56) LAND MASS TERRITORIAL WATER ( 12 NM) including sea bed, sub soil under water INDIA Continental Shelf of India & Exclusive Economic Zone & other Maritime Zone Air Space Above CA Rajiv Luthia

  7. Section 7 (3) & (4).. IGST -Supply of Service in course of Inter State trade or commerce • Subject to the provisions of section 12, supply of Service, where the location of the supplier andthe 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 service in the course of inter-State trade or commerce. • Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce. CA Rajiv Luthia

  8. Section 7 (5) IGST - Supply of goods or service or both in course of inter-state trade or commerce • 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 Special Economic Zone developer or a Special Economic Zone 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-Statetrade or commerce. CA Rajiv Luthia

  9. Section 8(1) - Supply of goods in course of intra-state trade or commerce Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply Provided following shall not be treated as intra-State supply, (i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods imported into the territory of India till they cross the customs frontiers of India; or (iii) supplies made to a tourist CA Rajiv Luthia

  10. Section 8(1) - Supply of goods in course of intra-state trade or commerce Section 15 of IGST - “Tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes. Foreign Tourist leaving India & carrying goods on his way back, which where purchased in India will be eligible for refund of IGST so paid…. Section 15 of IGST CA Rajiv Luthia

  11. Section 8(2) - Supply of Service in course of intra-state trade or commerce Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as “intra-State supply” Provided that the intra-State supply of services shall not include supply of services to or by a developer of SEZ or a SEZ unit. CA Rajiv Luthia

  12. Section 9 – Supplies in Territorial Waters Notwithstanding anything contained in this Act,–– (a) where the location of the supplier is in the territorial waters, the location of suchsupplier; or (b) 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. E.G.: POSin Bombay High will be treated as supply in state of Maharashtra. CA Rajiv Luthia

  13. PLACE OF SUPPLY CA Rajiv Luthia

  14. PLACE OF SUPPLY PLACE OF SUPPLY GOODS SERVICE Other than Imported or Exported Goods Location of Supplier & location of recipient is in India Location of Supplier or location of recipient is outside India Imported or Exported Goods Section 13 (IGST) Section 10 (IGST) Section 11 (IGST) Section 12 (IGST) CA Rajiv Luthia

  15. POS of goods, other than Imported or exported goods • “POS” is location of goods at the time at which the movement of goods terminates for delivery to the recipient where supply involves movement of goods. [10(1)(a)] • ISSUE: • KALPESH LTD. of Rajkot places order to ANKIT LTD. of Mumbai for supply of goods on ex-factory basis. The transporter for delivery is arranged & paid by KALPESH LTD. Determine POS? Whether SGST+CGST to be levied or IGST on above transaction? CA Rajiv Luthia

  16. POS of goods, other than Imported or exported goods • This transaction is covered by section 10(1) (a) of IGST • The above sections uses the term “ movement of goods, whether by supplier or the recipient or any other person” • Here the intention of law is to levy IGST, since movement for delivery terminates in other state. • The onus is upon the supplier to prove that movement has terminated in other state. • Advisable to have following documents as evidence : • LR & DC stating Supplier as consignor • E-way Bill to be generated by supplier, when made applicable • DC  to be issued by Supplier stating that movement completes in other state. • INTER STATE SUPPLY……IGST CA Rajiv Luthia

  17. POS of goods, other than Imported or exported goods • Delivery of goods by supplier to recipient/any other person on direction of third person, before or during movement of goods, POS is principal place of business of such third person. [10(1)(b)] • ISSUE: ABC Ltd. of Delhi places order to XYZ Ltd. of Mumbai for supply of goods. The delivery to be given by supplier to Pawar Ltd. of Pune. Determine POS? Whether SGST+CGST to be levied or IGST on above transaction? Recipient- PAWAR Ltd.- Pune Supplier XYZ Ltd.-Mumbai Agent/Principal Buyer (3rd Person) ABC Ltd. - Delhi POS - Delhi CA Rajiv Luthia

  18. POS of goods, other than Imported or exported goods • POS is location of goods at the time of delivery to the recipient where supply does not involve movement of goods [10(1)(c)]…..E.g. Retail counter • Where goods are assembled/installed at site, POS is place of such installation/assemble [10(1)(d)]. E.g. - Assembly of plant, installation of lift etc. • In case of goods supplied on board a conveyance, POS is location at which such goods are taken on board. [10(1)(e)] • POS cannot be determined from above,CG shall prescribe the manner [10(2)] CA Rajiv Luthia

  19. Place of Supply of Goods (Domestic) 1 when movement involved Place where movement terminates for Delivery 2 Bill to ship to model Person on whom bill is raised 3 When movement not involved Location of Goods at time of delivery Supply by way of assembly/installation Place of Such assembly/Installation 4 5 Place where goods are taken on board Supply on board a conveyance CA Rajiv Luthia

  20. Place of supply of Imported or Exported Goods.. Sec 11 • Goods imported into India – POS shall be location of Importer • Goods Exported from India – POS shall be location outside India CA Rajiv Luthia

  21. Place of supply of Imported or Exported Goods • ISSUE: • MODI LTD. of Mumbai, a merchant exporter places for purchase of chemicals to CHANG LTD. of CHINA. The said Chemicals are directly sold to OBAMA LTD. of USA on terms of foreign to foreign shipments. • Whether the said Triangular purchase and Sale would be covered under GST regime? • If yes, would it be called Import and export under GST? CA Rajiv Luthia

  22. Place of supply of Imported or Exported Goods • Section 5(1) of IGST levies tax on all inter-state supplies of goods or services or both • Section 10(1)(a) of IGST, where the supply involves movement of goods, the Place of Supply of Goods is the location of goods at the time when movement of goods terminates for delivery to the recipient. • Section 7 (5) (a) of IGST, when supplier located in India and POS is outside India, such supply is treated as supply in the course of inter-state trade or commerce. • Conjoint reading…….In above transaction, since supplier located in India and POS is outside India, it is “inter-state supply”. • Section 16(1) of IGST covers “export of goods” within the meaning of “zero rated supply”. • Section 2(5) of IGST defines “export of goods” means taking goods out of India to a place outside India. CA Rajiv Luthia

  23. Place of supply of Imported or Exported Goods • “Taking goods out of India” ????????? • Goods must be physically present in India since one can take goods out of India only when the goods were first bought/were already present in India. • Transaction not qualify as “export of goods”. Hence not “zero rated supply”. IGST leviable by virtue of Section 5(1) read with Section 7(5)(a) of IGST ???. • Supply transaction is outside the territorial waters, hence outside the territorial jurisdiction of IGST ?????.... The Act extends to whole of India. • Section 5(1) of IGST, Tax is levied on goods imported into India at the point when duties of customs are levied on goods U/s.12 of the Customs Act,1962. • Section 2(10) of IGST defines “import of goods” means bringing goods into India from a place outside India. • In the instant case, since the goods are never bought to Indian territory, the purchase transaction is not liable to IGST. CA Rajiv Luthia

  24. Place of supply of services (section 12 (2) of IGST Act) POS of services (other than specified services) -i.e. GENERAL RULE UNREGISTERED PERSON REGISTERED PERSON LOCATION OF SUCH PERSON LOCATION OF RECIPIENT WHERE ADDRESS ON RECORD EXIST LOCATION OF SUPPLIER IN ANY OTHER CASE Section 2(3) of CGST Act… “address on record” means the address of the recipient as available in the records of the supplier” • Applicable for determining POS, where location of supplier & recipient is in India CA Rajiv Luthia

  25. Place of supply of service LOCATION OF RECIPIENT– Section 2(14) (IGST) Where Supply is Received at Registered POB Where Supply is Received at Place Other than POB for which registration is obtained In Absence of Such places Where Supply is Received at More one than Establishment LOCATION OF SUCH POB LOCATION OF SUCH “FE” USUAL PLACE OF RESIDENCE OF RECIPIENT LOCATION OF ESTABLISHMNET MOST DIRECTLY CONCERN CA Rajiv Luthia

  26. Place of supply of service LOCATION OF SUPPLIER– Section 2(15) (IGST) Where Supply is made from Registered POB Where Supply is made from Other than POB In Absence of Such places Where Supply is made from more than one Establishment LOCATION OF SUCH POB LOCATION OF SUCH “FE” USUAL PLACE OF RESIDENCE OF SUPPLIER LOCATION OF ESTABLISHMNET MOST DIRECTLY CONCERN CA Rajiv Luthia

  27. Place of supply of services…Location of recipient Section 2(113) of CGST - “Usual place of residence” means–– (a) in case of an individual, the place where he ordinarily resides; (b) in other cases, the place where the person is incorporated or otherwise legally constituted “Location of recipient of service” is also defined at Section 2(70) of CGST Act…(Defined twice verbatim) “Location of Supplier of service” is also defined at Section 2(71) of CGST Act….(Defined twice verbatim) CA Rajiv Luthia

  28. Place of supply of services…Location of recipient • Section 2(50) ….. “fixed establishment” means a place (other than the registered POB) which is characterized by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to received and use services for its own needs…..Also defined 2(7) –IGST (Defined twice verbatim) • Section 2(89)…“principal place of business” means the place of business specified as the principal place of business in the certificate of registration • Section 2(85)… “place of business” includes • A place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods and/or services; • A place where a taxable person maintains his books of account; • A place where a taxable person is engaged in business through an agent, by whatever name called. CA Rajiv Luthia

  29. POS of Immovable property related services..12(3) POS - LOCATION OF IMMOVABLE PROPERTY/BOAT/ VESSEL Accommodation in immovable property for organizing marriage or reception or related matters, official, social, cultural, religious or business function including their related services Services directly in relation to immovable property, including services provided by Lodging accommodation by a hotel, inn, guest house, homestay, club or campsite, including houseboat or any other vessel..? Architects Interior Decorators Surveyors Engineers & other related Expert • Ancillary services to above services Estate Agents Grant of right to use Immovable Property Carrying out or co-ordination of Construction Work CA Rajiv Luthia

  30. Place of supply of Immovable property related services “X” Ltd – (Builder) Mr. A Delhi Mumbai Construction in Dubai POS DELHI • Where immovable property/boat/vessel is located in more than 1 state, supply is treated as made in each of the States/UT in proportion to the value of services collected or determined in term of contract or on other reasonable basis in absence of contract…..Can the immovable property be located in more than 1 State?.. E.g.- Accommodation given on Cruise • Location of Immovable property/boat/vessel is outside India or intended to be outside India , POS shall be location of recipient…… CA Rajiv Luthia

  31. POS Immovable property related services-ISSUE • NARESH SHETH LTD. is having ware house in Bhiwandi-Maharashtra. They render services of warehousing of goods to ABHISHEKH DOSHI LTD. Of Rajkot for storage of goods. Discuss POS? • Warehouse is immovable property • Is it service in relation to immovable property? • Covered under 12(2) or 12(3)????? CA Rajiv Luthia

  32. Place of supply of performance based services Home delivery Mr. A “X” Ltd (Caterer/ Hotel) Gujarat Maharashtra POS GUJARAT • POS is place of actual performance for following services [12(4)] • Restaurant (??????)& catering services; • Personal grooming • Fitness • Beauty treatment • Health service including cosmetic and plastic surgery CA Rajiv Luthia

  33. Place of supply of performance based services -ISSUE • NALINI YASMIN of Mumbai has rendered beauty treatment service to star cast of MOTION PICTURES PVT LTD. also of MUMBAI at their shooting location at OOTY. • Discuss POS? • SP & SR both located at Mumbai-Maharashtra • Place of Performance is POS • POS is Tamilnadu……. IGST CA Rajiv Luthia

  34. Place of supply of training services…Section 12(5) Services in relation to training and performance appraisal Supplied to a unregistered person Supplied to a registered person Location of such person Location where service are actual performed • Training through Tele-conferencing, video-conferencing etc….Place of performance??? CA Rajiv Luthia

  35. Place of supply of services of admission to events.. Section 12(6) • POS for services by way of admission, including ancillary servicesto : • a cultural, artistic, sporting, scientific, educational, or entertainment event; or • amusement park; or • any other place is where the event is actually held or where suchpark or other place is located. CA Rajiv Luthia

  36. Place of supply of services event related services…Section 12(7) Organization of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of service in relation to a conference, fair, exhibition, celebration or similar events • Services ancillary to organization of any of the above events or services, or assigning of sponsorship of any of the above events Supplied to a unregistered person Supplied to a registered person • If Event held outside India, Place of Supply shall be location of the recipient Place where event is actually held Location of such person CA Rajiv Luthia

  37. Place of supply of services event related services. Sec 12(7) • Where event is held in more than 1 state and a consolidated amount is charged, POS is taken as being in each of the States in proportion to the value of services so provided in each State as ascertained from the terms of contract or on other reasonable basis in absence of contract. CA Rajiv Luthia

  38. POS- event related services. Sec 12(7)-ISSUE • M/s R.J.LUTHIA & ASSOCIATES located & registered in Mumbai, organized GST seminar in SILVER PALACE, RAJKOT. • The fees for GST seminar is Rs. 10,000/- per pax. 200 participants enrolled ( i.e. 100 from Rajkot & 100 from Mumbai). • Discuss POS? • POS of service to registered person….location of such person • POS of service to unregistered person…..place where event held • If the seminar is organised at SRILANKA, what is POS • POS of services for event held outside india…..location of recipient CA Rajiv Luthia

  39. Place of supply of goods transport service…Section 12(8) Services by way of Transportation of goodsincluding mail or courier Supplied to a unregistered person Supplied to a registered person Location at which such goods are handed over for their transportation Location of such person CA Rajiv Luthia

  40. ISSUE • SAMEERLtd located in Mumbai. They avails GTA Service of M/s. KAPADIA TRANSPORT of RAJKOTto deliver goods from Job worker located at RAJKOT to another job worker located at BARODA at a freight of Rs 10,000/- • Discuss POS? • Whether GST is applicable on freight of Rs. 10,000/-?. If Yes, Who is liable to pay ? Whether CGST & SGST or IGST? CA Rajiv Luthia

  41. Analysis • POS Is Maharashtra in view of Section 12(8) • Location of supplier i.e. Transporter is Gujarat. • Hence, above GTA Transaction will be inter state supply in view of section 7(1) • Tax is payable under RCM as per notification 10/2017- IG CA Rajiv Luthia

  42. Place of supply of passenger transport service…Section 12(9) POS of passenger transportation services Supplied to a unregistered person Supplied to a registered person Placewhere the passenger embarks on the conveyance for a continuous journey Location of such person CA Rajiv Luthia

  43. Place of supply of passenger transport service Ticket booked at Mumbai Travelling from Mumbai – Gujarat Jet Airways – Mumbai Registered Person - Karnataka POS shall be Karnataka IGST will be charged CA Rajiv Luthia

  44. Place of supply of passenger transport service Ticket booked at Mumbai Travelling from Mumbai – Gujarat unregistered Person - Karnataka Jet Airways - Mumbai POS shall be Mumbai CGST & SGST of Maharashtra will be charged CA Rajiv Luthia

  45. Place of supply of passenger transport service • Where the right to passage is given for future use and point of embarkation is not known at the time of issue of right to passage, POS • If supplied to a registered person is location of such person. • If supplied to an unregistered person • Location of recipient where address on record exists; and • Location of supplier in other cases • Return journey is treated as a separate journey even if the right to passage for onward and return journey is issued at the same time. CA Rajiv Luthia

  46. Place of supply of passenger transport service Section 2(3) of IGST - “Continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued. Explanation : Explanation.––For the purposes of this clause, the term “stopover” means a place where a passenger can disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time CA Rajiv Luthia

  47. Place of supply of services on board a conveyance • POS of services on board a conveyance such as vessel, aircraft, train or motor vehicle is location of the first scheduled point of departure of the conveyance for the journey. [12(10))] • Section 2(34) of CGST Act… “conveyance” includes a vessel, • aircraft and a vehicle. CA Rajiv Luthia

  48. Place of supply of services on board a conveyance Mum- Del Leg Del – Kol leg Kolkata Mumbai Delhi Food Served on Delhi – Kolkata Leg to passenger boarded on flight from Delhi POS shall be Mumbai CA Rajiv Luthia

  49. Place of supply of telecommunication services…Section 12(11) POS of telecommunication service including data transfer, broadcasting, cable & DTH television services Mobile connection service on pre-payment through a voucher or any means By way of Fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna Mobile connection on post-paid basis Location of billing address of recipient of service on record of the supplier Through selling agent or re-seller or a distributor of SIM card or re-charge voucher By any person to final subscriber Location where they are installed Location where such pre-payment is received or such voucher are sold Address as per record of supplier CA Rajiv Luthia

  50. Place of supply of telecommunication services • Provided that where the address of the recipient as per the records of the supplier of services is not available, the place of supply shall be location of the supplier of services . • Provided If such pre-paid service is availed or recharge is made through internet banking or other electronic mode of payment, POS would be the location of recipient of service on record of the supplier • Explanation : where the leased circuit is installed in more than 1 state and a consolidated amount is charged, POS is taken as being in each of the States in proportion to the value of services so provided in each State as ascertained from the terms of contract or on other reasonable basis in absence of contract. CA Rajiv Luthia

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