IGST is applicable on following types of transaction:
When there is supply of goods or services in the course of inter-state trade or commerce and the location of the supplier and the place of supply are in different states.
- Supply of goods in the course of import into the territory of India till they cross the customs frontiers of India shall be deemed to be a supply of goods in the course of inter-State trade or commerce.
- Supply of services in the course of import into the territory of India shall be deemed to be a supply of services in the course of inter-State trade or commerce.
- Supply of goods and/or services, when the supplier is located in India and the place of supply is outside India, shall be deemed to be a supply of goods and/or services in the course of inter-State trade or commerce.
- Supply of goods and/ or services to or by a SEZ developer or an SEZ unit, shall be deemed to be a supply of goods and/or services in the course of inter-State trade or commerce.
- Any supply of goods and/or services in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be deemed to be a supply of goods and/or services in the course of inter-State trade or commerce.
- Please note there are some exceptions to such provisions which will be discussed later
Are there any exceptions to such provisions
Yes there are exceptions which is provided in draft IGST Law.
Exceptions When there is Supply of Goods
The below exceptions will not apply to import and export of goods.
Here are the exceptions:
The provisions of this section shall apply to determine the place of supply of goods other than supply of goods imported into, or exported from India
- Where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient.
- Where the goods are delivered by the supplier to a recipient or any other person, on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person
- Where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient.
- Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly
- Where the goods are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board
Exceptions When there is Supply of Services
The place of supply of services shall be location at the which immovable property is located or intended to be located when any supply of services is directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work
- When service is provided by way of lodging accommodation by a hotel, inn, guest house, homestay, club or campsite, by whatever name called and including a house boat or any other vessel, then place of place of supply will be location of boat or vessel
- When service is provided by way of accommodation in any immovable property for organizing any marriage or reception or matters related therewith, official, social, cultural, religious or business function including services provided in relation to such function at such property, then place of supply of service will be the location of such accomdation.
- The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed
- The place of supply of services in relation to training and performance appraisal to a registered person, shall be the location of such person and a person other than a registered person, shall be the location where the services are actually performed
- The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, or entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the event is actually held or where the park or such other place is located
- The place of supply of supply of services provide by way of 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 or shall be location of the registered person , for non-registered person it will be the place where the event is actually held
- The place of supply of services by way of transportation of goods, including by mail or courier to, (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.
- The place of supply of passenger transportation service to (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey