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TMI BlogIntegrated Goods and Services Tax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... being regulated in the present indirect tax system. It is significant to note that presently the Central Sales Tax Act, 1956 regulates the inter-state trade or commerce (hereinafter referred to as CST ) the authority for which is constitutionally derived from Article 269 of the Constitution. Further as per article 286 of the Constitution of India, no State can levy sales tax on any sales or purchase of goods that takes place outside the State or in the course of the import of the goods into, or export of the goods out of, the territory of India Only Parliament can levy tax on such transaction. The Central Sales Tax Act was enacted in 1956 to formulate principles for determining when a sale or purchase of goods takes place in the course of interstate trade or commerce. The Act also provides for the levy and collection of taxes on sale of goods in the course of interstate trade 4. The CST suffers from following shortcomings: i. CST is collected and retained by the origin state, which is an aberration. Any indirect tax, by definition is a consumption tax, the incidence of which is borne by the consumer. Logically, the tax should accrue to the destination state having jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a supply of goods or services in the course of inter-State trade or commerce. Any supply of goods or services in the taxable territory, not being an intra-State supply shall be deemed to be a supply of goods or services in the course of inter-State trade or commerce. Supplies to or by SEZ are defined as inter-State supply. Further supply of goods imported into territory of India till they cross the customs frontiers of India or supply of services imported into the territory of India shall be treated as supplies in the course of inter-State trade or commerce. Even supplies to international tourists are to be treated as inter-state supplies. ii. Intra-State supply: It has been defined as any supply where the location of the supplier and the place of supply are in the same State or Union territory. Intra state supply Inter-state supply Supply of goods within the state or union territory. Supply of services within the state or union territory Supply of goods from one state or union territory to other state or union territory. Supply of service from one state or union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involves 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. 2 where the goods are delivered to recipient or any person on the direction of third person by way of transfer of title or otherwise, it shall be deemed that third person has received the goods The principal place of business of such person 3 where there is no movement of goods either by supplier or recipient Location of such goods at the time of delivery to recipient 4 where goods are assembled or installed at site The place where the goods are assembled or installed 5 where the goods are supplied on board a conveyance, like vessel, aircraft, train or motor vehicle The place where such goods are taken on board the conveyance 6 Where the place of supply of goods cannot be determined in terms of sub-section (2), (3), (4) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veyance for a continuous journey 8 Services on board a conveyance Location of the first scheduled point of departure of that conveyance for the journey. 9 Telecommunication services. Services involving fixed line, circuits, dish etc., place of supply is location of such fixed equipment. In case of mobile/ internet post-paid services, it is location of billing address of the recipient. In case of sale of pre-paid voucher, place of supply is place of sale of such vouchers. In other cases it is address of the recipient in records. 10 Banking and other financial services, Location of the recipient of services on the records of the supplier. Location of the supplier of services if the location of the recipient of services is not available 11 Insurance services B2B : Location of such registered person; B2C : Location of the recipient of services on the records of the supplier 12 Advertisement services to the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the taxable territory, Its place of supply shall be the location in the taxable territory where the greatest proportion of the service is provided. 5.2 in more than one State its place of supply shall be each such state in proportion to the value of services so provided in each State 6. Banking, financial institutions, NBFC Intermediary services, hiring of vehicles services etc. Location of the supplier of service 7. Transportation of goods. The place of destination of the goods 8. Passenger transportation. Place where the passenger embarks on the conveyance for a continuous journey 9. Services on board a conveyance. The first scheduled point of departure of that conveyance for the journey. 10. online information and database access or retrieval services The location of recipient of service. ii. For the rest of the services other t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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