Determination of Place of supply of Goods [ Section 10 of IGST Act ] - GST Ready Reckoner - GST

Determination of Place of supply of Goods (1) Place of supply of goods other than supply of goods imported into, or exported from India Section 10 of IGST Act prescribes the provisions for determining the place of supply of goods in domestic transactions, i.e. within India. Section10(1) sets out five rules to provide the place of supply of goods in the following specific situations: Supply involving movement of goods Goods delivered on bill to ship to model Supply not involving movement of goods Goods assembled/installed at site Goods supplied on board a conveyance For residual provision, Section10(2) provides that where the place of supply of goods cannot be determined as per Section 10(1). (a) Involves Movement of Goods [ Section 10(1)(a) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Supply involves the movement of goods , whether- by the supplier or the recipient or by any other person. Location of the goods at the time at which, the movement of goods terminates for delivery to the recipient. Note: - 1. Location of the recipient is insignificant for the purpose of this clause. we have to find out where the movement of goods terminates in accordance with the terms of the contract. 2. There is no restriction on mode of transport. it can be move by any mode of transport i.e. air, road, train, port or any other mode. Mentioning details of inter-State supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1 [ Circular No. 89/08/2019-GST dated 18 Feb 2019(Extract) ] - 2. It has been brought to the notice of the Board that a number of registered persons have not reported the details of inter-State supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B . However, the said details have been mentioned in Table 7B of FORM GSTR-1 . In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, 2017 (CGST Act for short), hereby issues the following instructions. 3. It is pertinent to mention that apportionment of IGST collected on inter State supplies made to unregistered persons in the State where such supply takes place is based on the information reported in Table 3.2 of FORM GSTR-3B by the registered person. As such, non-mentioning of the said information results in (i) non-apportionment of the due amount of IGST to the State where such supply takes place; and (ii) a mis-match in the quantum of goods or services or both actually supplied in a State and the amount of integrated tax apportioned between the Centre and that State, and consequent non-compliance of sub-section (2) of section 17 of the Integrated Goods and Services Tax Act, 2017. 4. Accordingly, it is instructed that the registered persons making inter-State supplies to unregistered persons shall report the details of such supplies along with the place of supply in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1 as mandated by the law. Contravention of any of the provisions of the Act or the rules made there under attracts penal action under the provisions of section 125 of the CGST Act, 2017 Examples Example 1:- MA Pvt. Ltd. of Nasik, Maharashtra sells 10 refrigerators to MB Pvt. Ltd. of Pune, Maharashtra for delivery at place of business of MB Pvt. Ltd. in Pune. Place of supply of goods:- Pune in Maharashtra Nature of transaction :- Intra state supply [ CGST +SGST will be levied ] Example 2. Mr. Raj of Mumbai, Maharashtra sells 30 TV sets to Mr. Vinod of Bangalore, Karnataka Place of supply of goods:- Bangalore in Karnataka. Nature of transaction :- Inter state supply [ IGST will be levied] Example 3. A factory in state X makes a supply on ex-works basis to recipient located in state Y. the recipient collects the goods from the factory un state X and thereafter takes the goods to state Y. In such case whether such transaction would be an intra sate supply as the goods delivered to the recipient in sate X and the movement was only a post delivery movement or an inter state supply as the goods were moved by the recipient to state. In this case termination of goods deemed to as per contract between supply, the recipient said the goods carry in state Y, so according to contract that transaction would be in the nature of transaction. (b) Three or more parties- bill to ship to Model [ Section 10(1)(b) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Where the goods are delivered to the recipient or any person on the direction of the third person, either by way of transfer of title or otherwise, whether acting as an agent or otherwise, before or during movement of goods. Principal place of business of such third person, who s give direction. (It shall be deemed that the said third person has received the goods) Examples :- Example 1:- M/s X Co. registered in Noida Uttar Pradesh asks to M/s Y Co. of Ahmedabad, Gujarat to deliver 50 washing machines to its buyer M/s Z Co. at Jaipur, Rajasthan. In this case , two supplies are involved, The place of supply shall be :- First supply is between M/s Y Co. of Ahmedabad, Gujarat and M/s X Co. Noida (U.P.) Place of supply of goods:- M/s Y Co. of Ahmedabad, Gujarat [Deemed to Goods received by M/s X co. as per section 10(1)(b)] Nature of Transaction:- Inter-state supply. [ IGST will be levied] Second suppy is between M/s X Co. Noida (U.P.) and M/s Z Co. (Rajasthan) Place of supply of goods:- M/s Z Co. (Rajasthan) Nature of Transaction:- Inter-state supply. [ IGST will be levied] Example 2: - M/s X Co. registered in Noida, Uttar Pradesh asks to M/s Y Co. registered in Lucknow, Uttar Pradesh to deliver 50 washing machines to its buyer M/s Z Co. registered in Banaras, Uttar Pradesh. In this case , two supplies are involved, The place of supply shall be :- First supply is between M/s Y co. (Lucknow, U.P.) and M/s X Co. (Noida, U.P.) Place of supply of goods:- M/s X Co. (Noida, U.P.) [Deemed to Goods received by M/s X co. as per section 10(1)(b)] Nature of Transaction:- Intra-state supply [ CGST +SGST will be levied ] Second supply is between M/s X Co. (Noida, U.P.) and M/s Z Co. (Banaras, U.P.) Place of supply of goods:- M/s Z Co. (Banaras, U.P.) Nature of Transaction:- Intra-state supply [ CGST +SGST will be levied ] (c) Supply does not involve movement of goods [ Section 10(1)(c) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Where there is no movement of goods either by supplier or recipient location of such goods at the time of the delivery to the recipient; Eamples Example 1:- Sugar Pvt. Ltd. (New Delhi) has leased his machine (cost Rs. 8,00,000) to Mahagun Pvt. Ltd. (Noida, Uttar Pradesh) for production of goods on a monthly rent of Rs. 40,000. After 14 months Mahagun Pvt. Ltd. requested Sugar Pvt. Ltd. to sell the machine to it for Rs. 4,00,000 which is agreed to by Sugar Pvt. Ltd. In this case, there will be no movement of goods and the same will be sold on as is where is basis. Place of supply of goods:- The location of the machine at the time of such sale will be the i.e. Noida. Nature of transaction : - Inter state supply. [ IGST will be levied] Example 2 :- Bharat Limited registered in Maharashtra sold its pre-installed transmission tower(electric tower) located at Madhya Pradesh to Hindustan Limited registered in Delhi. Place of supply of goods:- Madhya Pradesh. Nature of transaction : - Inter state supply. [ IGST will be levied] (d) Supply of Goods to a unregistered person [ Section 10(1)(ca) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply where the supply of goods is made to a person other than a registered person , Address recorded in invoice:- the location as per the address of the said person recorded in the invoice issued Address not recorded in the invoice:- the location of the supplier where the address of the said person is not recorded in the invoice. Explanation . For the purposes of this clause, 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 ; Note 1. 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. [ Circular No. 209/3/2024-GST Dated 26/06/2024 ] (e) Goods are assembled or installed at site [ Section 10(1)(d) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Where goods are assembled or installed at site, Example Installation of plant machinery. Place where the goods are assembled or installed. Examples:- Example 1 :- Honey Refineries (Mumbai) gives a contract to PQ Ltd. (Jharkhand) to supply a machine which is required to be assembled in a power plant in its refinery located in Kutch, Gujarat. Place of supply of goods:- is the site of assembly of machine, i.e. Kutch even though Pure refineries is located in Maharashtra Nature of Transaction :- Inter state of supply [ IGST will be levied] Example 2 :- Mr. X from Noida orders a machine from Mr. Y from Ghaziabad . Mr. Y installs the machine at Mr. X s office premises at Noida. Place of supply of goods:- will be Noida (where the goods installed) Nature of transaction :- Intra state supply [ CGST +SGST will be levied ] Example 3:- Bharat Limited registered in Maharashtra opens a new office in Delhi. It purchases 10 ACs to be installed at its Delhi office from Patil electronics in Maharashtra. In this case, the location of the supplier is Maharashtra, but Place of supply of goods:- Delhi (where AC installed ). Nature of Transaction :- Inter State supply [ IGST will be levied] (f) Goods are supplied on board a conveyance [ Section 10(1)(e) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Where the goods are supplied onboard a conveyance like a vessel, aircraft, train or motor vehicle. Place where such goods are taken on-board the conveyance. Note:- 1. This provision includes those purchases which are done while traveling on a conveyance. 2. Here, two supplies are involved First, supply of goods to operator of the conveyances and second is By the operator to the passenger during the journey in the conveyance. The place of supply appointed under this sub-section is in respect of the second limb which is the supply by the operator of the conveyance during its journey to the passenger. Examples :- Example 1 :- Mr. Shyam (New Delhi) boards the New Delhi-Kota train at New Delhi. The goods taken on board by him (at New Delhi), in the train, such goods sold at Jaipur during the journey. Place of supply of goods:- Goods is the location at which the goods are taken on board, i.e., New Delhi and not Jaipur where they have been sold Nature of transaction :- Intra state supply. [ CGST +SGST will be levied ] Example 2 :- Mr. Mehta ( Mumbai) is traveling on a cruise liner from Mumbai to Goa. He purchases a book from the in-house store in the cruise liner. These books were on-boarded from Mumbai. Registered place of business of the book shop is in Mumbai. Place of supply of goods:- Mumbai. Nature of transaction :- Intra state supply, [ CGST +SGST will be levied ] Example 3:- Mr. X take on board in Delhi in , Delhi to Allahbad Rajdhani Express provides meals during the Journey from Delhi to Allahabad. During the journey, the train receives the food at Aligarh in Uttar Pradesh. sale the meal to Mr. X in Lucknow in Uttar Pradesh. Place of supply of goods:- Aligarh Uttar Pradesh Nature of transaction :- Inter state supply, [ IGST will be levied ] (g) where place of supply cannot be determined [ Section 10(2) of IGST Act, 2017 ] Nature of Supply of goods Place of Supply Where the place of supply of goods cannot be determined in terms of the provisions mentioned in section 10(1). To be determined in the prescribed manner. No notification has been issued prescribing the case u/s 10(2) of IGST Act.