Place of Supply for Interior Works, Goods and Services Tax - GST

[MOODUKONAJE HARISH]

Dear All, a registered dealer in Bangalore provides interior work services to an immovable property in Mumbai. The service recipient is also registered in Mumbai. The work includes interior services for a showroom, it includes POP, wooden works, lights, wirings, etc. It is a composite supply. He purchases all the materials in Mumbai & gets IGST bill. He claims ITC on the same & raises IGST bill at 18% to the customer in Mumbai.

Query :

1. Do The above services comes under SAC 998391 or it will be considered as work contract under SAC 9954.

2. Do the service provider needs to take separate registration in Mumbai & raise a C/SGST invoice or he can raise a IGST bill from Bangalore.

Pls advice.

Posts / Replies

[GUNASEKARAN K]

Dear Moodukonjaje Harish,

1. The relevant SAC is 998391

2. The service provider no need to take GST registration at Maharashtra & he can raise the tax invoice with IGST at 18% for his interior service.

[DR.MARIAPPAN GOVINDARAJAN]

The service provider need not take registration at Mumbai.

[KASTURI SETHI]

In my opinion, SAC is 9954, it being a composite supply. Regarding place of supply, I agree with both experts.

[MOODUKONAJE HARISH]

Thank you all for your valuable advice.

[Amit Agrawal]

Dear Querist,

A. Heading '998391' is for 'Specialty design services including interior design, fashion design, industrial design and other specialty design services' whereas subject register's services are 'actual execution using material & labor'. And hence, subject services would fall under Section 9954.

B. So as to answer your second question, it is my presumptive understanding that services provided by the tax-payer falls under works-contract as defined u/s 2(119) of the CGST Act, 2017.

B. Here, I hold a view that such tax-payer is also compulsorily liable to take registration in Mumbai (Maharashtra) under GST.

B2. For reasons behind my view about mandatory requirement of taking registration at Mumbai (the actual site of work) in situation under discussion here, one may look into my multiple posts under Issue-ID: 118425 bearing subject-line as 'place of supply, Goods and Services Tax - GST'

B3. I am aware that many of such type of tax-payers avoid taking such registration in other states. But, avoiding such registration in other states (where actual site of work lies) can be risky & litigation-prone from multiple angles in my humble view.

C. If subject tax-payer is in-turn receiving services from local vendors from Mumbai / Maharashtra where place of supply is 'Mumbai / Maharashtra' (& not Bangalore / Karnataka) because of certain situations covered under Section 12 of the IGST Act, 2017 (For example: situations falling sub-section (3)) and based on my professional experience, this happens very often in these line of businesses, not taking registration at Mumbai will also result into loss of ITC for such tax-payers.

D. From the legal requirements as explained in Para B above & business requirement as explained in Para C above, it is better to take registration in other states (where actual site of work lies) in this line of business.

D1. Compliance costs of additional registration/s are far less that 'risk, litigation-costs and loss/es in ITC' in my humble view.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

In above post of mine, please read Para D1 as follows: Compliance costs of additional registration/s are far less that 'risk, litigation-costs and loss/es in ITC if such such additional registrations are not taken', in my humble view.

[Shilpi Jain]

HSN 9954

Since supply made at site a view emanates that registration required. However, if it can be shown that the work cannot be independently carried out at site but requires support from the HO/main office in the other State, coupled with the fact that there is no fixed establishment in the other State, no new registration would be required.

Another option is to see if casual taxable person registration can be taken if the work is for short period of time.

Not taking registration would at the max only be a procedural non-compliance and should not lead to heavy demand from department, even if the department considers that new registration is a requirement to be fulfilled.

[MOODUKONAJE HARISH]

Thank you, for your valuable advice.