Clarification regarding determination of place of supply in case of software/design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry.

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..... 37/2019-GST) DATED: 17.10.2019 Subject: Clarification regarding determination of place of supply in case of software/design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry. Various representations have been received from trade and industry seeking clarification on determination of place of supply in case of supply of software/design services by a supplier .....

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..... licon or hardware design. These designs are communicated abroad (in industry standard electronic formats) either to the customer or (on behest of the customer) a manufacturing facility for the manufacture of hardware based on such designs. 2.1 In addition, the software developed is also integrated upon or customized to this hardware. On some occasions, samples of such prototype hardware are then .....

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..... ngal Goods & Services Tax Act, 2017 (hereinafter referred to as "the WBGST Act") clarifies the same as below. 4. In contracts where service provider is involved in a composite supply of software development and design for integrated circuits electronically, testing of software on sample prototype hardware is often an ancillary supply, whereas, chip design/software development is the principal sup .....

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..... , is the location of the service recipient as per Section 13(2) of the IGST Act. Provisions of Section 13(3)(a) of IGST Act do not apply separately for determining the place of supply for ancillary supply in such cases. 5. Difficulty, if any, in implementation of this circular may be brought to the notice of the Commissioner. 6. This Trade Circular shall be deemed to have come into force on 11.1 .....

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