CBIC Issues Clarification Regarding Determination Of Place Of Supply

The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification regarding the determination of the place of supply.

The Board has received representations from the trade and field formations seeking clarification with respect to the determination of place of supply in case of supply of service or transportation of goods, including through mail and courier; supply of services in respect of advertising sector; and supply of the “co-location services”.

The Board has clarified that the Place of supply of services where the location of the supplier or location of recipient is outside India is determined as per section 13 of the IGST Act. Sub-section (9) of section 13 of the IGST Act provided that where one of the suppliers of the services or the recipient of services is located outside India, the place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. The sub-section has been omitted vide section 162 of the Finance Act, 2023 which will come into effect from 01.10.2023.

After the amendment comes into effect, the place of supply of services of transportation of goods, other than through mail and courier, in cases where the location of supplier of services or location of the recipient of services is outside India, will be determined by the default rule under section 13(2) of IGST Act and not as performance-based services under sub-section (3) of section 13 of IGST Act.

In cases where the location of the recipient of services is available, the place of supply of services shall be the location of the recipient of services and in cases where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

The place of supply of service provided by way of sale of space on hoarding/ structure for advertising or for grant of rights to use the hoarding/ structure for advertising in this case would be the location where such hoarding/ structure is located.

The services provided by the Vendor to advertising companies are purely in the nature of advertisement services in respect of which Place of Supply shall be determined in terms of Section 12(2) of the IGST Act.

The place of supply of the colocation services shall not be determined by the provisions of clause (a) of sub-section (3) of Section 12 of the IGST Act but the same shall be determined by the default place of supply provision under sub-section (2) of Section 12 of the IGST Act i.e. location of recipient of co-location service.

Circular No. 203/15/2023-GST

Date: 27/10/2023

Click Here To Read The Circular