PLACE OF SUPPLY OF GOODS TO UNREGISTERED PERSON UNDER SECTION 10(1) OF IGST ACT, 2017

[Mr. M. GOVINDARAJAN]

Place of supply under IGST Act

Section 10 of the Integrated Goods and Services Tax Act, 2017 (‘Act’ for short) provides for place of supply of goods other than supply of goods imported into or exported from India.  Vide Notification dated 18.08.2023, the Central Government amended the said Act.  In this amendment a new section 10(1)(ca) was inserted.  The newly inserted section provides that where the supply of goods is made to a person other than a registered person, the place of supply shall, notwithstanding anything contrary contained in clause (a) or clause (c), be the location as per the address of the said person recorded in the invoice issued in respect of the said supply and the location of the supplier where the address of the said person is not recorded in the invoice.

The explanation to the above said section 10(1) provides that recording of the name of the State of the said person in the invoice shall be deemed to be the recording of the address of the said person. 

The above said section came into effect from 01.10.2023. Section 10(1)(ca) is a non-obstante provision overriding the provisions under Section 10 (1) (a) or 10 (1) (c) of IGST Act. 

Clarification

The trade and industry sought for clarification on the above said section from the Board  in case of supply of goods made to an unregistered person where billing address is different from the address of delivery of goods, especially in the context of supply being made through e-commerce platforms.  In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board issued circular dated 26.06.2024. 

To consider the place of supply of goods, particularly being supplied through e-commerce platform to unregistered persons where billing address is different from the address of delivery of goods the Board gave one query on this issue in this circular.  The said query is –

• Mr. A (unregistered person) located in X State places an order on an e-commerce platform for supply of a mobile phone, which is to be delivered at an address located in Y State. Mr. A, while placing the order on the e-commerce platform, provides the billing address located in X state. In such a scenario, what would be the place of supply of the said supply of mobile phone,

• whether the State pertaining to the billing address i.e. State X; or
• the State pertaining to the delivery address i.e. State Y?

The Board issued clarification for the above said query as detailed below-

• Section 10(1)(ca) provides that where the supply of goods is made to an unregistered person, the place of supply would be the location as per the address of the said person recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice. Further, as per Explanation to the said clause, recording the name of the State of the said unregistered person on the invoice shall be deemed to be the recording of the address of the said person.
• The Board clarifies that in such cases involving supply of goods to an unregistered person, where the address of delivery of goods recorded on the invoice is different from the billing address of the said unregistered person on the invoice, the place of supply of goods in accordance with the provisions of Section 10(1)(ca) of the Act shall be the address of delivery of goods recorded on the invoice i.e. State Y in the present case where the delivery address is located.

Where the billing address and delivery address are different, the supplier may record the delivery address as the address of the recipient on the invoice for the purpose of determination of place of supply of the said supply of goods.