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TMI Blogplace of supplyX X X X Extracts X X X X X X X X Extracts X X X X ..... ONE PARTY IS PROVIDING CRANE SERVICE SUPPLIER IS REGISTRED IN HARYANA AND RECIPENT IS REGISTERED IN MAHARASTRA AND THE SERVICE PROVIDIDE AT HARYANA THEN WHAT WILL APPLICABLE IGST OR CGST AND SGST SEC 12 OF IGST WHICH CLAUSE IS APPLICABLE IN THIS SITUATION - Reply By KASTURI SETHI - The Reply = IGST is applicable. - Reply By Shilpi Jain - The Reply = What is the reason that the service recipient of Haryana is taking a crane from Maharashtra? Is the work undertaken in MH by a person having registration in Haryana? Further facts needed, what is the nature of service to check if it is a service relating to immovable property and thereby tax type may change. - Reply By Amit Agrawal - The Reply = More facts clarity needed. Sub-section (3) of Section 12 of the IGST Act, 2017 might come into play. It is also possible the service-recipient (in given situation) is liable to get itself registered in Haryana but avoiding the same. So, before deciding to charge IGST or CGST SGST, one needs to take into account many factual situation applicable legal provisions. These are ex facie views of mine and the same should not be construed as professional advice / sugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion. - Reply By mahima arora - The Reply = recipient has a civil work contract in haryana ( party is not registerd in haryana) , recipent asked bill with maharastra gstn and palce of supply in maharstra so as they can claim itc. but the confusion is about place of supply - Reply By Amit Agrawal - The Reply = Assuming that you are referring to 'construction of immovable property' and services of crane services being ancillary to those activities, Section 12 (3) of the IGST Act, 2017 is applicable. And Place of supply is the location of the immovable property (i.e. Haryana). Hence, supplier of crane-services needs to charge CGST SGST ( NOT IGST) against given supply. This legal position can not change just because recipient has not taken registration in Haryana (though, he is most likely, liable to take that registration). These are ex facie views of mine and the same should not be construed as professional advice / suggestion. - Reply By mahima arora - The Reply = THANKS FOR YOUR OPINION - Reply By Alkesh Jani - The Reply = Shri/Ku. In this regards, I agree with the views of Shri Kasturiji Sir, that IGST is applicable. Thanks - Reply By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amit Agrawal - The Reply = Dear Shri Alkesh Ji, Request you to kindly elaborate your views please - Reply By Alkesh Jani - The Reply = Shri Amitji Querist, At the very outset, supply of crane is supply of service of tangible goods. Supplier of Service is in Haryana and Services will be supplied to person registered in Maharashtra, although services are consumed in Haryana, the supply of service is neither event based or performance based. Section 12 (2) (a) of IGST Act, 2017 will be applicable. If doubt persist, one can opt for Advance Ruling. Thanks - Reply By Amit Agrawal - The Reply = Thanks Shri Alkesh Ji for your elaboration! In view of my understanding of factual position read with Section 12 (3) of the IGST Act, 2017 , as spelt in my post at serial no. 5 above , I most respectfully cannot agree with your views. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. I respect contrary views. - Reply By Padmanathan Kollengode - The Reply = Dear Alkesh Ji, Pls note that AAR is not competent to decide Place of Supply for the want of jurisdiction. - Reply By Padmanathan Koll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engode - The Reply = Dear Querist, In my opinion the said service of providing crane is ancilliary for construction of immovable property and POS will be Haryana as per Sec 12(3)(d) of IGST Act, 2017 . hence, it will be subject to CGST SGST. - Reply By Alkesh Jani - The Reply = Shri Padmanathan Kollengode Ji, With regard to your reply No.11, Please refer judgement of High Court of Kerala in case of SUTHERLAND MORTGAGE SERVICES INC Vs. THE PRINCIPAL COMMISSIONER 2020 (3) TMI 186 - KERALA HIGH COURT based on this Rulings are available. Thanks - Reply By Padmanathan Kollengode - The Reply = Alkesh Sir, With respect to Sutherlands decision of Kerala High Court in 2020 (3) TMI 186 - KERALA HIGH COURT , the court has held that the question sought by the petitioner had bearing on larger question of determination of liability to pay tax on goods or services or both and for that purpose , remitted the matter back to AAR for fresh consideration. In my considerate opinion, it does not mean AAR has jurisdiction to rule on POS. In the present issue, the question does not have any bearing on determination of liability to pay tax. - Reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By Alkesh Jani - The Reply = Shri Padmanathan Kollengode Ji, Our expert Shri M. GOVINDARAJAN Ji has written an article on this, link is given below. To be proud of he is also an Expert in our forum. Let us seek guidance from him and request him to comment in the matter for larger public interest. https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8986 - Reply By Amit Agrawal - The Reply = Dear Shri Alkesh Ji, Shri Kasturi Ji, Shri Padmanatham Ji all my fellow professional colleagues, PLEASE TREAT THIS AS PURE ACADEMIC DISCUSSION: In my post at serial No. 5 above, I had also stated as follows: ' This legal position can not change just because recipient has not taken registration in Haryana ( though, he is most likely, liable to take that registration ) .' Lets analyse ongoing dispute taking base-case from Shri Alkesh Ji's point of view (in his post at serial No. 9 above) where he felt that Section 12 (2) (a) of IGST Act, 2017 will be applicable, even if services are consumed in Haryana, as supply of crane is supply of service of tangible good/s. As per said Section 12 (2) (a) of the IGST Act, 2017, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e place of supply of services, except the services specified in sub-sections (3) to (14), made to a registered person shall be the location of such person ; Now, issue to my mind is, what is 'location of such registered person (i.e. location of registered recipient of subject services under discussion here)'? As per Section 2 (70) (b) of the CGST Act, 2017 , location of the recipient of services means, where a supply is received at a place other than the place of business for which registration has been obtained ( a fixed establishment elsewhere ), the location of such fixed establishment ; As per Section 2 (50) of the CGST Act, 2017 , fixed establishment means a place ( other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services , or to receive and use services for its own needs ; Querist, in her post at serial no. 4 above, has already clarified that recipient (who is registered in Maharashtra) has a civil work contract in Haryana. Logically follows therefrom that this recipient must have a place ( which can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be even the 'construction-site' where he is executing said civil-work contract) ) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply its civil-work services (otherwise, how he is providing those output civil-work services in Haryana?) as well as to receive and use services for its own needs ( such as crane-services so provided by supplier registered in Haryana in this subject matter ). In any case in such contract such as crane-service, PO / Agreement / Understanding between parties clearly states (or known between parties) that these services are required for particular project / place where civil-work is carried by the recipient (which is Haryana, in this case). Summarising above, I would argue that even if Section 12 (2) (a) of the IGST Act, 2017 is applicable for given crane-services, STILL, location of registered recipient is Haryana. Hence, supplier of crane-service (registered located in Haryana) needs to charge CGST SGST not IGST and 'place of supply' is Haryana. Your views, including counter arguments, please P.S. As the cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of repetition, PLEASE TREAT THIS AS PURE ACADEMIC DISCUSSION. I am well aware of implication of above arguments - as put by me - if upheld by court/s in future. - Reply By Amit Agrawal - The Reply = * Please also Read ' Ms. Shilpi Jain Mam' in start of my earlier post. - Reply By Alkesh Jani - The Reply = Shri Amitji, The observation of Advance Ruling in case of In re GEW (India) Pvt. Ltd. (GST AAR Karnataka) 2021 (11) TMI 394 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA is as below It is observed that, as per Section 12(3) of the Integrated Goods and Services Act, 2017 ( IGST Act ), service provided by the Applicant in relation to immovable property by way of grant of right to use immovable property or for carrying out or coordination of construction work or any ancillary services, the place of supply of services shall be location of immovable property i.e. Karnataka. Held that, as the location of the supplier, Noida, Uttar Pradesh and place of supply of service, Karnataka are at two different states so as per Section 7(3) of the IGST Act the supply of service will be considered as inter-state supply and accordingly IGST will be charged. Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the Applicant is not required to take separate registration in Karnataka for the supply of services and can raise the invoice by charging IGST from their registered office at Noida, Uttar Pradesh, with the place of supply as Karnataka. From above, it is clear that AAR can give ruling with regards to place of supply and ratio is also applicable. Thanks - Reply By Amit Agrawal - The Reply = Dear Shri Alkesh Ji, Thanks for sharing wonderful AAR (Citation: 2021 (11) TMI 394 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA ) , though, as you are aware, same (as in where case of advance ruling) is binding only between parties thereto and for the facts stated therein. And said ruling gives followings as finding of facts in Para 13: In the instant case, the applicant has obtained registration for the premises located at Noida, UP and hence the location of the supplier of services is the place of business of the applicant. It is also pertinent to note that the applicant has no fixed establishment in the State of Karnataka as on date. Furthermore, said AAR also ruled that ' Since the applicant are neither having nor intending to have any establishment at the si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te at Karwar, Karnataka , they cannot obtain ISD registration for the site at which they are delivering service .'. One more thing, I missed mentioning ( my apologies for the same) - as I was more focused on Section 12 (2) (a) location of registered recipient - is as follows: A. As per Section 2 (20) of the CGST Act, 2017 , casual taxable person means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business. A1. And 'casual taxable persons making taxable supply' needs to take compulsory registration u/s 24 (ii) read with Section 25 (1) . A2. I feel that effects of these provisions are not yet dealt with in proper perspectives (specially when thought for 'person registered in Maharashtra' providing civil work services in Haryana). Having said that, your post referred AAR is definitely thought-provoking and I am very much thankful to you for that. Other views please. P.S. As the cost of repetition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PLEASE TREAT ALL THIS AS PURE ACADEMIC DISCUSSION. I am well aware of implication of above arguments - as put by me - if upheld by court/s in future. - Reply By Alkesh Jani - The Reply = Shri Amitji, the above referred AAR, it is also observed that :- ..t he Applicant is not required to take separate registration in Karnataka for the supply of services and can raise the invoice by charging IGST from their registered office at Noida, Uttar Pradesh, with the place of supply as Karnataka . With regard to 'Casual Taxable person' the registration is valid for limited period and can be extended to limited period. Moreover, person has to deposit the tax in advance. while in the works contract, it may not be completed within that time period. Further, I agree that the ruling given by AAR is for applicant and jurisdiction office only, but it is pertinent to note that AAR is an Authority recognised under Law, and interpretation made vide such ruling are also effective ground unless contrary decision is given by higher legal forum. This is the best of all I have. Thanks - Reply By KASTURI SETHI - The Reply = Sh.Alkesh Jani Ji, An AAR decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has persuasive value. You have worked hard on this issue. All-out efforts made by you will not end in smoke. Your efforts will help the visitors of TMI. I am really thankful to you. - Reply By Amit Agrawal - The Reply = Dear Alkesh Ji, Thank you very much for taking these academic discussions in right spirit. Taking the same forward, I want to state the followings: You are right when stated that ' With regard to 'Casual Taxable person' the registration is valid for limited period and can be extended to limited period .'. W.r.t. definition of 'fixed establishment', 'a sufficient degree of permanence' is one of important criteria (and non-having 'a sufficient degree of permanence' - as per facts put by the applicant - has greatly impacted outcome of referred AAR ruling in case of M/S. GEW (INDIA) PVT. LTD. - 2021 (11) TMI 394 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA , in my view ). Issue is whether any registered person which is undertaking supply of civil-work (i.e. construction of immovable property) in another state and which require time more than allowed for casual taxable person' can be said to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;a sufficient degree of permanence' so as to qualify as 'Fixed Establishment'. And if yes, taking registration in other state becomes compulsory ..... one way or other, applying principals of harmonious interpretation. Let's also remember that place of business - as per Section 2 (85) (a) - includes a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both ;. In the subject supply under discussion here, you agree that said crane-services are consumed in Haryana. And your reliance upon Section 12 (2) (a) - to determine place of supply - is from point of view of nature of services provided (i.e. supply of crane is supply of service of tangible goods). As per Section 2 (61) , Input Service Distributor means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office; And taking registration as ISD is compulsory u/s 24 (viii) read with Section 25 (1) . Said AAR - in its Para 19 - denies the applicant to get registration as ISD on the ground that ' It is an admitted fact that the applicant neither have nor intend to have any establishment at the site at Karwar, Karnataka and hence cannot obtain the ISD registration '. Again, having 'an establishment' (i.e. 'office' in context of ISD) is different from having 'a fixed establishment' in my view ( same need not necessarily be (though, can be) at actual site ) and AAR failed to recognize the same. Further Section 2 (70) (c) of the CGST Act states that location of the recipient of services means, where a supply is received at more than one establishment , whether the place of business or fixed establishment , the location of the establishment most directly concerned with the receipt of the supply; Even though this discussion is strictly limited to determination of place of supply under Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) (a) of the IGST Act, 2017 for given facts ( not ignoring Section 12 (3) to determine place of supply for purpose of this discussion), fact remains that 'place of supply' can be different from registered place of the recipient in situations covered in sub-sections (3) to (14) therein. And location of recipient - under Section 2 (70) - covers 'a fixed establishment elsewhere' as well as 'more than one establishment, whether the place of business or fixed establishment'. Looking these relevant provisions in their entirety, I am not too convinced about accuracy of said ARR ruling, specially in the context of factual position under discussion here, referred provisions and on our points of difference/s. Having said that, I am really grateful for your insights, Shri Alkesh Ji! Thank you once again! I am aware that issue/s are far more complex and it may take years (may be decade more) to have proper legal jurisprudence to evolve on multiple inter-linked issues. Other views please. P.S. As the cost of repetition, PLEASE TREAT ALL THIS AS PURE ACADEMIC DISCUSSION. I am well aware of implication of above arguments - as put by me - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if upheld by court/s in future. - Reply By Amit Agrawal - The Reply = In my last post, please read relevant Para as follows: Even though this discussion is strictly limited to determination of place of supply under Section 12 (2) (a) of the IGST Act, 2017 for given facts ( ignoring Section 12 (3) to determine place of supply for purpose of this discussion), ....... - Reply By Amit Agrawal - The Reply = Dear Shri Kasturi Sethi Ji, I agree with you that Shri Alkesh Ji has put all out efforts to make this discussion meaningful and my earlier posts specifically recognise them in no uncertain terms. - Reply By Amit Agrawal - The Reply = W.r.t. referred AAR ruling in case of M/S. GEW (INDIA) PVT. LTD. (Citation: 2021 (11) TMI 394 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA ) question about authority of AAR to look into 'place of supply', following points are worth noting: A. As a outcome summary, said AAR simple protected interest of state of Karnataka by asking supplier to raise invoices showing place of supply as Karnataka while denying him to use facility of ISD to transfer ITC (from state of Karnataka) against input services to supplier's registered s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate. B. Whether AAR (Haryana) will have same approach when 'supplier registered in Haryana' giving crane-services which is admittedly consumed in state of Haryana .... I doubt this very much, after going through experience till date from so many rulings from these authorities on varied subject/s. C. Earlier discussion shows how determination of place of supply have so many angles - both from supplier and recipient's end and ultimately , it make two states / UT fighting with each other using complex legal provisions (many of which are referred to, in earliest posts). D. As understood from media reports, only principal bench of tribunal at Delhi is expected to take up cases involving determination of place of supply. This is because it is expected that different state / UT will take contrary positions on same set of facts by looking into these facts / issues / legal provisions from their own prism. All this proves that how taking calls on 'place of supply' can be very very difficult .... even for expert professionals. Ultimately, objective of any good professional, in my humble view, will be to give his opinion .. no doubt .... only on given facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable law, but simultaneously protecting interest of his client (i.e. who is asking questions paying fees) by taking least-risky way. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. I respect contrary views. - Reply By Amit Agrawal - The Reply = To add to my last post: To understand complexities involved even better, take a hypothetical scenario where civil-services provided by registered suppler of Maharashtra (but undertaken in state of Haryana) is exempted from GST for any reason while crane-services - supplied ( consumed in Haryana) by the supplier registered in Haryana to recipient registered person of Maharashtra - is not exempted. - Reply By Alkesh Jani - The Reply = Shri Kasturiji Sir, Shri Amitji and all participants, My heartly thanks to all of you, Shri Kasturiji Sir, taught me that we lay foundation and it is the querist to choose the path. Thanks to all once again. With regards, - Reply By GST MADURAI - The Reply = In this case ultimate revenue should go to Haryana state as the place of ultimate supply is Haryan. As the Supplier from Maharashtra will avail the credit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input service provided by the crane operator. Now there are two methods:- (i) the supplier from Maharashtra may take registration in Haryana. (ii) He may ask the crane operator to issue to invoice in his principle place of business with IGST, and he will avail the credit, further he can issue the invoice in the name of actual recipients with levying the IGST and here he can set off the liability. - place of supply - Query Started By: - mahima arora Dated:- 17-3-2023 Goods and Services Tax - GST - Got 28 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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