issue for place of service, Goods and Services Tax - GST

[nayaz shaik]

sir/ madam

the client is engaged in umblical cord storage services . The client is having multi state operations i.e andhra pradesh, telangana , karnataka. The client is having storage facility in karnataka only. the client normally bills invoices from each state separately for the conecrned state customers. once the customers approaches for the facility.

1. then the client will give suggestions for food habits , regulars excecises to be done to have problem free delivery of the baby.

2. At the time of delivery , the client present at the hospital and cuts the umblical cord under high sterized conditons of the baby delivered.

3. after extraction of the umblical cord, the umblical cord will be processed and stored in high sterilized bag .

4. The bag will be sent to the storage facility ( karnataka ) for further processing and storage upto 21 years.

5. when ever the baby or any family member of baby suffers from any chronic disease , then the customer will approach the client , then the client will get umblical cord from the storage facility ( karnataka) to the client office ( telangana) and gives back to the customer.

6. The main point in the agreement between client and customer is , when ever the customer needs the sample, the same should be delivered to the customer place where the original transaction took place. for example ; at the time of contract, if the customer is from telangana , then the contract will made between client's telangana office and customer. the sample will be then sent for storage facility at karnataka. whenever the customer needs the sample , then client ( telangana office ) will get the sample from karnataka storage facility and will deliver the sample to the customer in telangana.

now my question is ;

1. what is the place of service if the client is having office at telangana and customer from telangana ( client biils the invoice from telangana office ) but client having storage facility in karnataka.

2. can i treat the above service in line with "COLD STORAGE FACILITY", where it is mentioned that the place of service ends in a place where the movement of the goods terminated for customer i.e telangana.

pls provide the response along with concerned rules in the act and case laws if any.

now my question is

1. If the

Posts / Replies

[Alkesh Jani]

Shri

On going through your query, I am of the view that, the service provided by you can be classified under HSN Code 999317 with description Blood, sperm and organ bank services.

Further, it is not clear that registration is obtained for each state or a single registration for Karnataka is obtained and is there any element of consideration present so as to fall within the ambit of “Supply”. If so, it is wise to charge IGST.

You can also raise Invoice to Telangana, with IGST and Telangana may raise Invoice with CGST and SGST, by availing ITC of IGST.

If doubt persist, you may opt for Advance Ruling.

Thanks

[nayaz shaik]

we are taking registartion for each state separately

[Padmanathan Kollengode]

I agree the service will fall under 999317 blood, sperm and organ bank services.

Section 12 of IGST Act provides for Place of supply:

(1) The provisions of this section shall apply to determine the place of supply of services where the location of supplier of services and the location of the recipient of services is in India.

(2) The place of supply of services, except the services specified in sub-sections (3) to (14),––

(a) made to a registered person shall be the location of such person;

(b) made to any person other than a registered person shall be,––

(i) the location of the recipient where the address on record exists; and

(ii) the location of the supplier of services in other cases.

Assuming that client is not registered but address is available on record, the place of supply shall be the location of the recipient under Sec. 12(3)(b)(i).

Therefore since location of supplier and place of supply is both telangana, it is intra-state supply and CGST + SGST has to be charged.

Also consider, cross charging may apply between the Karnataka unit and Telangana unit as they are distinct persons and Sch I will apply.

[Shilpi Jain]

Telangana location will invoice the customer in Telangana with CGST and SGST.

Karnataka registration will have to invoice to the TS registration.

Another way of doing this would be that centralised invoicing can be done from Karnataka registration to the customers with C/SGST and IGST as applicable and all the other registrations can invoice to Karnataka registration for the support services provided.