LEVY AND COLLECTION GST

MODULE II
Forms of supply:
Under GST, supply includes all forms of supply of goods or
services or both. So either it should be a good or service or else
it does not attract GST.
Goods:
“Goods means every kind of movable property other than
money and securities but includes actionable claim, growing
crops, grass and things attached to or forming part of the land
which are agreed to be severed before supply or under a
contract of supply.
 Goods

It Excludes
It includes
Money and Securities
Actionable Claims
Growing Crops, Grass,etc.
Money: As per section 2(75) of CGST Act, “Money means the
Indian legal or any foreign currency, cheque, promissory note, bills
of exchange, letter of credit, draft, pay order, traveller cheque,
money order, postal or electronic remittance or any other
instrument recognised by the Reserve Bank of India when used as a
consideration to settle an obligation or exchange with Indian legal
tender of another denomination but shall not include any currency
that is held for its numismatic value.
Transaction in money: The transaction in money it outside the
ambit of GST as it is not included in the definition of
goods/services. If a separate consideration is charged for these
activities, then this consideration is subject to GST.
For example if Rs.2,000 note is exchanged for 20 notes of Rs.100 and
Rs.50 is charged for that, then GST becomes payable on Rs.50.
Securities: It includes shares, scrips, stock, bonds, debentures, stock or
other marketable securities, derivatives, government security, mutual
fund units and interest on securities.
Securities are neither goods nor services
Service: the term services has been defined under sec2(102) of CGST
Act, 2017. ‘Service means anything other than goods, money and
securities but includes activities relating to the use of money or its
conversion by cash or by any other mode, from one form, currency or
denomination to another form currency or denomination for which a
separate consideration is charged.’
Service excludes Goods money and securities
Types of Supplies

I. On the basis of movement/flow

i) Inward supply: In relation to a person ‘inward supply’
means receipt of goods or services or both, whether by purchase
acquisition or any other means with or without consideration
ii) Outward supply: In relation to a taxable person
“outward supply” means supply of goods or services or both,
whether by sale, transfer, barter, exchange, license , rental, lease
or disposal or any other mode, made or agreed to be made by
such person in the course of furtherance of business.
II. Types of Supplies on the basis of continuity
i) One time supply: it simply refers to supply of goods or
services which is provided or agreed to be provided on non-
recurrent basis as a Standalone supply.
ii) Continuous supply: it may be as regards goods as well as for
services.
a) continuous supply of goods under section 2(32) means a
supply of goods which is provided or agreed to be provided
continuously or on recurrent basis, under a contract, whether or
not by means of a wire, cable, pipeline or other conduit, and for
which the supplier invoices the recipient on a regular or periodic
basis.
b)Continuous supply of services : as per section 2(33) of CGST Act,
2017, means a supply of services which is provided or agreed to be
provided, continuously or on recurrent basis, under a contract , for a
period exceeding three months with periodic payment obligations.

III. On the basis of taxability

a) Taxable supply: as per section 2(108) of CGST Act, 2017, it
refers to a supply of goods and/or services which is leviable under
CGST Act.
b) Non-Taxable supply: As per section 2(78) of CGST Act, 2017, it
means a supply of goods or services or both which is not leviable
to tax under CGST Act or Under the IGST Act.
c) Exempt supply: as per section 2(47) of CGST Act, 2017, means a
supply of any goods or services or both which attracts Nil rate of tax
or which may be wholly exempt from tax under section 11, or under
section 6 of IGST Act, and includes non-taxable supply.
d) Zero Rated Supply: It is supply of any goods and/or Services on
which not tax is payable but input tax credit pertaining to that supply
is admissible. As per sec16(1) of IGST Act, 2017, it means any of
the following supplies of goods or services or both, namely:
a) Export of goods or services or both; or
b) Supply of goods or services or both to a special Economic Zone
developer or a special economic zone unit.
IV. On the Basis of Geographical Location
1) Inter-State supply: as per section 7(1) of IGST Act, subject to the
provisions of section 10, supply of goods, where the location of the
supplier and the place of supply are in :-
a) two different states
b) two different Union Territories or
c) a State and a Union Territory
as per section 7(3) subject to the provisions of sec. 12 supply of
services where the location of the supplier and the place of supply are
in :-
a) two different states
b) two different Union Territories or
c) a State and a Union Territory
Shall be treated as supply in the course of Inter state trade .
2) Intra-State Supply: as per section 8(1) of IGST Act, subject to
the provisions of section 10, supply of goods, where the location of
the supplier and the place of supply are in th:e same state or same
Union Territory shall be treated as intra-state supply:
Provided that the following supply of goods shall not be treated as
intra state supply :
i) Supply of goods to or by a Special Economic Zone developer
or a Special Economic Zone unit;
ii) Goods imported into the territory of India till they cross the
customs frontiers of India or
iii) Supplies made to a tourist referred to in section 15.
3) Supplies in the territorial waters: As per section 9 of
IGST Act, not withstanding anything contained in this Act-
a) Where the location of the supplier is in the territorial
waters the location of such supplier or
b) Where the place of supply is in the territorial waters the
place of supply, shall for the purposes of this Act, be
deemed to be in the coastal state or union territory
where the nearest point of the appropriate baseline is
located.
V. On the basis of goods supplied in conjunction.
1) Composite Supply: As per sec2(30) of CGST Act, 2017 means a
supply made by a taxable person to a recipient of two or more
taxable supplies of goods or services or both or any combination
thereof, which are naturally bundled and supplied in conjunction
with each other in the ordinary course of business one of which is a
principal supply.
2) Mixed Supply: As per sec 2(74) ‘Mixed supply means two or more
individual supplies of goods or services or any combination thereof,
made in conjunction with each other by a taxable person for a single
price where such supply does not constitute a composite supply.’ In
other words the individual supplies are independent of each other
and are not naturally bundled.
Examples of composite supply:
Xiaomi communications limited has recently a mobile phone
with the brand name ‘Redmi Note 4’ the company supplies
the accessories and charger along with the handset.

Example of Mixed Supply:

A supply of a package comprising of shirt, trouser, tie and
belt for a single price.

Rent deed executed for renting of the different floors of a

building, one for residence and another for commercial
purpose to the same person.
Important Terms
Business: As per sec2(17) of CGST Act, 2017 the term business
includes:
a) Any trade, commerce, manufacture, profession, vocation ,
adventure, wager or any other similar activity, whether or not it is
for a pecuniary benefit.
b) Any activity or transaction in connection with or incidental or
ancillary to sub-clause (a)
c) Any activity or transaction in the nature of sub-clause(a) whether
or not there is volume, frequency, continuity, or regularity of such
transaction
d) Supply or acquisition of goods including capital goods and
services in connection with commencement or closure of business.
e) Provision by a club, association, society, or any such body (for a
subscription or any other consideration ) of the facilities, or benefits to
its members.
f) Admission for a consideration of persons to any premises
g) Services supplied by a person as the holder of an office which has
been accepted by him in the course of or furtherance of his trade,
profession or vocation;
h) Activities of a race club including by way of totalisator or a license to
book maker or activities of a licensed book maker in such club and
g) Any activity or transactiuon under taken by the central government, a
state government or any local authority in which they are engaged as
public authorities.
The term “person” has been defined in Section 2(73) of the GST Act
as follows:
An Individual
A Hindu Undivided Family
A Company
A Partnership Firm
A Limited Liability Partnership
An Association of Persons or a Body of Individuals, whether
incorporated or not, in India or outside India
Any Corporation Established by or under any Central, State or
Provincial Act, or a Government Company
Any body corporate incorporated by or under the laws of a country
outside India
A co-operative society registered under any law relating to
cooperative societies
A local authorityGovernment
Society as defined under the Societies Act, 1860
Trusts , Artificial judicial person, not falling within any of the above
categories
Definition of taxable person sec 2(107)
Taxable person means a person who is registered or liable to be
registered under section 22 or 24.
A taxable person means
a)Registered person is a taxable person
b)Even an unregistered person who is liable to be registered is a
taxable person.
c)A person not liable to be registered, but has taken voluntary
registration and got himself registered is also a taxable person
In the course of Business or in the furtherance of business

Only those supplies that are in the course or furtherance of business

qualify as supply under GST. There is one exception to this course
or furtherance of business rule that import of services for a
consideration.
Consideration
As per sec 2(31) of CGST Act, 2017.
1) Monetary consideration: The term consideration includes
monetary consideration
2) Non-monetary consideration: Under GST consideration also
includes non-monetary consideration, which simply implies
compensation in kind.
The following shall be included as non-monetary consideration:
a) Supply of goods or service in return for provision of service
b) Refraining or forbearing to to an act for provision of service
c) Tolerating an act or a situation in return for provision of service.
3) Who will pay consideration: The consideration is paid by recipient
of the supply. But it need not always flow from the recipient of the
supply; it can also be made by a third person.
4) Determination of value: the value of supply is determined in the
manner specified in Section 15 of the CGST Act, 2017.
5) Government Subsidy: The consideration does not include any
subsidy given by the Central Government or a state government.
6) Deposit: The deposit may be of two types: refundable and
non refundable - if the deposit is non-refundable then such
deposit is treated as supply under GST

7) Donation: The Donation or charity does not attract GST

unless this donation imposes an obligation on the recipient to
provide something in return.
8) Art work sent by artists to galleries for exhibition is NOT a
supply.
 Provisions in relations to supply

Scope of Supply (section 7) Schedule of Supply (three

Schedules)
Section 7(1): Inclusions in
Supply I. Treated as Supply, even if without
consideration
Section 7(2): Neither supply of II. Classification of Supply into
goods nor services Goods/services
Section 7(3): Central III. Neither supply of goods nor
Government may notify supply of services.
Parameters of Supply
a) It should be supply of goods or services only
b) The supply should be made for a consideration
c) The supply should be made in the course or furtherance of business
d) It should be made by a taxable person
e) It should be a taxable supply
Exceptions to above parameters
1) There are few cases in Schedule I where the supply is considered
even if the same is without consideration
2) In the case of import of service for a consideration, the same is
treated as supply whether or not it is in course or furtherance of
business
3) There are few exceptional cases where the transaction is not treated
as supply despite of existence of all the parameters. A list of activities
is given in Schedule III ( may be called as negative list of services)
Schedule I (Supply without consideration)
In the following four cases, the supplies made even without
consideration will be treated as supply under Section 7 of the CGST
Act:
1. Permanent Transfer/Disposal of Business Assets
2. Supply between related person or distinct persons
3. Supply of goods by a principal to his Agent
4. Importation of services
1) Permanent Transfer or Disposal of the Business Assets
to qualify as supply the following conditions need to be satisfied
i) There must be a disposal of business asset
ii) Transfer/Disposal must be permanent
iii) Input Tax Credit must have been availed on such business
asset.
for Example: XY Z limited had purchased computer for
business purposes and ITC on the same has been availed. After
one year, these computers are permanently transferred to a
charitable school without consideration. This permanent transfer
is subject to GST although it is made without consideration.
2) Supply between related person or distinct person
Related person:
The term has been defined in explanation to sec 15 of CGST Act
i)Such persons are officers or directors of one another’s business
ii) Such persons are legally recognised partners in business
iii) Such persons are employer and employee
iv) Any person directly or indirectly own, controls or holds 25% or more
of the outstanding voting stock or shares of both of them;
v) One of them directly or indirectly controls the other;
vi) Both of them are directly or indirectly controlled by a third person
vii) Together they directly or indirectly control a third person or they are
members of the same family;
Distinct person: As per section 25(4) of the CGST Act, 2017, a
person who has obtained or is required to obtain more than one
registration whether in one state or Union territory or more than one
state or union territory shall in respect of each such registration be
treated as distinct persons for the purposes of this Act.

The supply of goods or services or both between related persons or

between distinct persons would be taxable even though it is without
consideration, provided it is made in the course of furtherance of
Business.
1.Supply between Employer and Employee
2. About Gift by Employer to Employee
3. Stock Transfers or Branch transfers
services may be supplied by one branch to another branch of same
entity without consideration
Goods transferred among different units of same entity free of cost.
Transfer of goods from factory to depot/showroom for sale there
from
From one ware house to another or from one branch to another
Under GST laws, these transactions undertaken even without
consideration will qualify as supply, provided the transfer of goods or
services is between:
i) Different locations (with Separate GST registrations) of same
legal entity as these are transactions between distinct persons or
ii) Establishments of distinct persons
Not a supply:
The transfer between two units of a legal entity under single
registrations (within same state) will not be considered as supply.

Supply of goods between Principal and Agent

The Supply of goods by a Principal to his agent, without
consideration where the agent undertakes to supply such goods on
behalf of the principal is considered as supply.

Supply of goods by an agent to his Principal without consideration,

where the agent undertakes to receive such goods on behalf of the
principal is considered as supply.
Importation of services(related person located outside India)

The import of services by a person from a related person or from his

establishment located outside India, without consideration, the course
or furtherance of business shall be treated as supply.
Example: Khandelwal Associates received legal consultancy services
from its head office located in USA . The head office has rendered
such services free of cost to its branch office. Since Khandelwal
Associates and the head office are related persons in the given case,
the given transaction will qualify as supply even though no
consideration has been charges for the services.
Schedule III Specifies the transactions or activities which shall be neither
treated as supply of goods nor a supply of services. These transactions
or activities can be termed “Negative List” under the GST Regime.
1)Services by an employee to the employer in the course of or in relation
to his employment
2)Services by any court or tribunal established under any law for the time
being in force
3)A) Functions performed by Member of Parliament, Members of State
Legislature and so on
B) duties performed by any person who holds any post in pursuance
of the provision of the constitution
C) Duties performed by any person as a chair person or a Member or a
director in a body established by the Central Government or a State
government or local authority
4) Services of funeral, burial, crematorium or mortuary including
transportation of the deceased.
5) Sale of land
6) Actionable Claims, other than lottery betting and gambling
7) Supply of goods from a place in the non-taxable territory to
another place in Non-taxable territory.
8) a) supply of warehoused goods to any person before clearance
for home consumption
b) supply of goods by the consignee to any other person, by
endorsement of documents of title to the goods after the goods
have been dispatched from the port of origin located outside India
but before clearance for home consumption .
Activities/ transactions notified by the government(Negative list)
In order to attract the section 7(2)(b) of CGST Act, the following
conditions are applicable:
1) An activity/transaction is undertaken by the Central Government,
State Government or Union Territory or any local authority
2) They are engaged as public authority
3) Such activity is notified for the purpose of section 7(2) (b) by the
Government on recommendation of GST Council.
If all the above three conditions are satisfied the activity/transaction
shall be treated neither as a supply of goods nor as supply of
services.
Place of supply
The provisions regarding place of supply of goods or services are
provided in Chapter V of IGST Act., from sections 10 to 14.
Section 10: Place of supply of Goods other than supply of goods
imported into, or exported from India.
Section 11: Place of supply of Goods imported into, or exported
from India
Section 12: Place of supply of Services where location of supplier
and recipient is in India.
Section 13: Place of Supply of services where location of supplier
or location of recipient is outside India.
Section 14: Special Provision for payment of tax by a supplier of
online information and database access or retrieval services
I. Place of supply of domestic transactions involving goods
The Section 10(1) of the IGST Act has provided the five rules or
determination of place of supply of domestic transactions, which are
as follows:
a)Supply involving movement of goods
In the case of supply, involving movement of goods the place of
supply is the location of the goods at the time when the movement
of goods terminates for delivery to the recipient. The movement
can be undertaken the supplier or the recipient. It may even taken
by any other person after the supplier or the recipient discloses the
destination to the person.
Example:
1) Muskaan ltd(Delhi) is a registered dealer in Mumbai, Maharastra. It
supplies 40 washing machines to VIVA Electronics ( a registered
dealer) of Jaipur, Rajasthan. VIVA electronics has taken the washing
machines from supplier’s ex-factory at Mumbai.
Place of Supply: Jaipur (Rajasthan)
Location of Supplier: Mumbai (Maharastra)
Nature of Supply: Inter-state liable to IGST.
2) Sharma Pvt Ltd. (Delhi) sells 40 units of certain goods to M Ltd.
(Bengaluru). The goods are delivered in Bengaluru through transport
arranged by Sharma Ltd.
Place of Supply : Bengaluru , Location of Supplier: Delhi
Nature of supply: Inter state liable to IGST.
b) Goods delivered on “Bill to ship to” Model:
As per sec 10(1)(b) where the goods are delivered by the
supplier to a recipient or any other person the direction of a third
person, whether acting as an agent or otherwise, before or
during movement of goods, either by way of transfer of
documents of title to the goods or otherwise, it shall be deemed
that the said third person as received the goods and the place of
supply of such goods shall be the principal place of business of
such person.
Mr. Vimal ( a supplier registered in Punjab having principal place of
business in Ludhiana) asks Mr. Sumit of Agra, UP to deliver 25 fabric
knitting machines to his buyer Mr. Nikunj at Alwar, Rajasthan. There
are three parties:
i)(Sumit) supplier
ii) (Mr. Nikunj) Recipient
iii) Third party on whose instructions the goods are delivered (Mr.
Vimal)
In this case basically two supplies are involved:
i) Between Vimal and Nikunj
ii) Between Sumit and Vimal
The second supply is Bill to ship model where place of supply is
Ludhiana (Punjab) location of supplier: Agra UP and liable to IGST
Ritu Ltd.(Noida, UP) instructs Kamal Ltd. (AGRA, UP) to supply
certain goods to Mr. Varad of Jaipur, Rajasthan. Accordingly
kamal Ltd. Supplies the specified goods to Mr.Varad on behalf of
Ritu limited.
Kamal Ltd: Supplier, Varad ltd: Recipeint & Ritu Ltd.Third party.
As per Sec.10(1)(b) it shall be deemed that the said third person
has received the goods.
Place of supply: Noida, UP
Location of Supplier: Agra (UP)
Nature of Supply: Intra-State liable to CGST and SGST
c) Supply not involving movement of Goods:
As per Sec 10(1) ( c ) “ Where the supply does not involve movement
of goods ( Whether by the supplier or the recipeint) the place of
supply shall be the location of such goods at the time of the delivery
to the recipient.
Example : HB leasing ltd.(Tamilnadu) has leased his machine (cost
Rs.28,00,000/- to Mr. Prateek (Alwar, Rajasthan) for use in
manufacturing at monthly rent of Rs.40,000. After 2 years Prateek
requested the lessor company to sell the machine to him for
Rs.10,00,000 which is agreed to by HB Leasing Ltd. In this case
there is not movement of goods and the same will be sold on “as is
where basis is”. There fore the location of machine at the time of sale
will be the place of supply that is Alwar, Rajasthan.
d) Supply involving installation or Assembly of goods
As per Sec10(1)(d) “ Where the goods are assembled or
installed at site, the place of supply shall be the place of such
installation or assembly.”

Example: A purchases a machine from B, where both A & B

are in Delhi. The machine however needs to be installed in
Faridabad (Harayana). The place of supply will be Faridabad
as the machine is installed in Faridabad and IGST is
applicable.
Ruchi soya ltd( Meerut, UP) gives a contract to BHEL Ltd.(Bilaspur,
Himachal Pradesh) to supply a heavy motor machine which is
required to be assembled in a factory located in Manali, HP.
Place of supply: Manali, Himachal Pradesh
Location of Supplier: Bilaspur, Himachal Pradesh
Nature of supply: Intra state liable to CGST and SGST
e) Goods supplied on Board a conveyance
As per sec. 10(1) (e) “ Where the goods are supplied on board a
conveyance, including a vessel, an aircraft, a train or a motor
vehicle, the place of supply shall be the location at which such
goods are taken on board.
Example :
Mr.Z boarded the train at New Delhi for its destination
Mumbai. He carried some goods with him for the purpose of
sale during the journey. When the train reaches Surat, he sells
certain goods. Now in this case the place of supply of such
goods will be NewDelhi i.e., the location at which the goods
are taken on board.
II. Place of supply of goods imported into or exported from
India. (Cross Border Transactions) Section 11.
a) Export of goods:
When goods are exported from India, then the place of
supply of such goods shall the location outside India i.e., the
place where the goods have been exported. Such export of
goods have been treated as Inter-State supply but no GST is
payable as it has been declared as Zero- rated supplies.
b) Import of goods:
If the goods have been imported into India, the place of
supply of goods is the place where the importer is located. It is
treated as inter-state supplies and it attracts IGST along with
Custom duties. In the case of some products like Pan Masala
GST Compensation cess is also levied.
Example:
Z of Chennai, imported goods from USA. The place of supply
will be Chennai i.e., the location of importer.
III. Place of supply of Services where location of supplier of
service and the location of the Recipient of services is in India:
[Domestic transactions in services]
As per Sec.12 of the IGST Act, 2017 when the location of supplier
of service and the location of recipient of service is in India, the
place of supply of services is governed by
a) General Provisions
b) Specific Provisions
General Provisions [Section 12(2)] :
These are applicable only if the supply of service does not fall in
any of the specific cases provided under section 12.
a) Where the recipient is a registered person:
In case the recipient is a registered person the location of such
registered person shall be the place of supply. For example, A
supplies services to B, who is a registered person. In this case the
place of supply will be the location of such registered person. That
is the location of B.
b)Where the recipient is an unregistered person.
In case, the recipient is an unregistered person, the place of supply
will still be the location of recipient, if the address of recipient
exists on record. However in case the address of recipient does not
exist on record, then place of supply of service would be the
location of the supplier.
Example :
1)Mr. A provides designing services to an Advertisement Company.
The Recipient company is a registered person. The location of
recipient that is the location of the advertising Company will be the
place of supply.
2) Mr. A supplies services to Mr.B in India who is an unregistered
person but A has the address of B in his records, the place of supply
will be location of B
3) A Barber provides services to so many customers daily but he
does not record their names and addresses. The place of supply will
be the location of the Barber.
Specific Provisions:
1. Services in relation to an immovable property/boat/vessel
sec.12(3)
The provisions relating to place of supply can be summarized as
follows:
Nature of supply Location of immovable Place of supply
property/boat/vessel
Supply of services In India Location of such
relating to immovable
immovable property/boat/vessel
property/boat/
Outside India Location of the
vessel including
Recipient
accommodation
therein
Example:
X is provided architectural services to Y of Delhi. X and Y are
registered under GST. X has place of business in Nagpur. The
building is situtated in Delhi. The place of supply will be Delhi.

Example:
Suresh a registered person place of business in Ahmedabad. He
visits Mumbai for business purpose and stays in a hotel there.
The place of supply will be Mumbai where the Hotel is located.
2. Restaurant service, personal grooming/fitness/beauty and
health services. [Section 12(4)]
The place of supply of restaurant and catering services, personal
grooming, fitness, beauty treatment, health service including
cosmetic and plastic surgery is the location where such services are
actually performed.
Example:
Z stays in Delhi but visits a nearby Gymansium in Noida(UP).
The place of supply will be Noida where services are actually
performed.
3. Training and performance appraisal services[section 12(5)]
Type of Service Place of supply
Training and If it is B2B supply If it is B2C supply
performance appraisal then location of a then location where
registered recipient the services are
performed
Example:
Z carries performance appraisal of he employees of XYZ a firm
which is not registered under the Act. XYZ is located in Moradabad
but appraisal was conducted in Nainital. As XYZ is not registered
the place of supply shall be the place where services are acutally
performed. i.e., Nainital.
4. Services by way of admission to events/amusement parks/other
places [section 12(6)]
Place of supply is place where the event is actually held or where the
park or such other place is located.
5. Organisation of Events [section 12(7)]
When such service is provided to a registered person, the place of
supply is location of recipient. When it is provided to an unregistered
person the place of supply is the location where the event is actually
held and if the event is held outside India the place of supply is the
location of the Recipient.
A Company having place of business in Hyderabad , registered under
GST, hires the services of X of Delhi for organizing promotional events
for the company at all the metro-cities. The place of supply is
If A is not registered , place of supply will be each place where the
event is held.
If events are held in New York and London, place of supply would be
the location of recipient, still Hyderabad.

6. Transportation of goods including mails [section 12(8)]

The place of supply of services by way of transportation of goods
including by mail or courier, etc. provided to a registered person is
the location of such person.
However where such services are provided to an unregistered person,
the place of supply is the location at which such goods are handed
over for their transportation.
Example:
ABC is a registered Company in Kolkata. It hires the services of
courier company in Chennai to send some important documents from
Chennai Office to the New Delhi branch. Since the Recipient ABC is
registered the place of supply will be the location of recipient that is
Kolkata.
If ABC had been unregistered the place of supply would been the
location, where goods are handed over for their transportation that is
Chennai.
7. Passenger Transportation service [section 12(9)]
Type of service Place of supply
Recipient is Recipient is unregistered
registered
Passenger Transportation Location of the Location where the passenger
recipient embarks on the conveyance for a
continuous journey
Issue of right to passage Location of the If the address of the unregistered
for future use and the Recipient person is available in the records
point of boarding knot of supplier, the location of such
known at the time of unregistered person.
issue of right In other cases the location of the
supplier of services.
Example
1)Mr. C travels from Mumbai to Nagpur. C is registered person in
Delhi and therefore the place of supply is the location of recipient
which is Delhi.
2) Mr. A is unregistered person who lives in kolkatta. His address is
known to the supplier. He boards a train at Jaipur to travel to Kolkata.
The place of supply is Jaipur
3) Mr.A buys a metro card in New Delhi. He is entitled to use the
card anywhere in Delhi, Faridabad and Noida which is not
predetermined at the time of buying the card. Here the place of
supply will be the location of supplier of services i.e.,New Delhi.
The metro company does not have the address of Mr. A.
8.Service supplied on board a conveyance [section 12(10)]
For determining the place of supply of both goods and services
supplied on board a conveyance, no distinction is made between
registered and unregistered recipients.
Types of service Place of Supply Example
Service supplied on board Location of the first In India “ Enjoy on
a conveyance such as scheduled point of wheels” is a train which
vessel, aircraft train or departure of that runs from Jaipur to
motor vehicle conveyance for the Kanyakumari and
journey provides entertainment
services. For outward
journey the place of
supply will be jaipur and
for return journey it will
be Kanyakumari.
9. Telecommunication service [section12(11)]
Supply Place of supply Example
1.Services by way of Place where the B takes a lease line
fixed tele- telecommunication line, connection at his house
communication line, leased circuit or cable in Jaipur from C of
leased circuits, internet connection or dish Mumbai. The place of
leased circuit, cable or antenna is installed supply is the location of
dish antenna B where lease line is
installed.

2. Post paid mobile The billing address of A takes a post paid

connection and post paid recipient of services on telephone connection.
internet services the record of the supplier Place os supply will be
of services the address of A on
records with the supplier
3. Prepaid mobile Through a selling agent
connection and prepaid or a re-seller or a
internet and DTH distributor of
services through a subscriber identity
voucher or any other module card or re-
means charge voucher, the
address of the selling
agent or the re-seller,
as per the records of
the supplier
4. In other cases The address of the
recipient as per the
records of the supplier
of services and if the
address is not available
the location of supplier
5. If payment is made The address of the
is made through net recipient as per the
banking or E-mode records of the supplier
of services
10.Banking, Financial and stock broking services[section
12(12)
The place of supply of banking and other financial services,
including stock broking services to any person is the location of
the recipient of services on the records of the supplier of
services.
However if the location of recipient of services is not on the
records of the supplier, the place of supply is the location of the
supplier of services.
Example: A buys shares from a stock broker C in Mumbai. A resides
in Kota (Rajasthan) place of supply is the address of A in the records
of ‘C’ which is Kota.
11. Insurance Services [section 12(13)]
The place of supply is dependent on whether the Recipient is
registered or unregistered. The place of supply of insurance services
is the location of recipient when provided to a registered recipient.
If such services are provided to a person other than a registered
person, the place of supply is the location of the recipient of services
in the records of the supplier of services.
XY Ltd is registered in Gurugaon and gets his assets insured. The
place of supply is the location of recipient that is Gurgaon
12. Advertisement service to the Government [section 12(14)]

Type of service Place of Supply

Advertisement service to the Each of such states or union
Central Government/State territories where the
Government/Statutory advertisement is
body/Local Authority meant broadcasted/run/played
for the State or Union
Territory identified in contract
or agreement
IV. Place of supply of services where location of supplier or
location of recipient is outside India [Cross Border transactions]
The place of supply of services where location of supplier or location
of recipient is outside India are also governed by General And
Specific provisions.
General Provisions sec.13(2)
The location of the recipient of services shall be the place of supply
of services 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 supplier of services.
Example: A of US provided services to B in India, the place of supply
will be the place of Business of B.
Specific Provisions :
1. Performance based services [section13(3)]
Services requiring physical presence of goods, the place of
supply is the location where the service is actually performed.
Example:
Z wants to install machinery in Faridabad which is imported
from Japan. The Engineers from Japan have to come to India
for the purpose of installation of the machinery. Here the
services are such which requires the physical presence of the
Engineer therefore the palce of supply will be the place of
where the machinery is installed that is Faridabad.
Example : A of USA sent its machine to India for repairs. C
Repaired the machine and without any use in India, exported it back to
USA. The place of supply will be the location of A that is USA. If the
location of A was not known then it would have been the location of
Supplier C.
2. Services in relation to immovable property [Section 13(4)]
If services supplied directly in relation to an immovable property , the
place of supply is location of immovable property
If the above services are supplied at more than one location, including
a location in taxable territory the place of supply is location in the
taxable territory.
If the above services are supplied in more than one state/Union
territory than place of supply is each of State/ Union Territory.
3. Services by way of admission to and/or organisation of event
or celebrations etc. [section 13(5)]
Services supplied by way of admission to or organisation of
following: cultural, artistic, sporting ,scientific, educational,
entertainment events, the place of supply is where the event is
actually held.
4.Banking and Financial services, intermediary services and
Hiring of means of transport [section 13(8)]
Services supplied by a banking company or a financial institution or
NBFC to account holders, intermediary services, Services
consisiting of hiring of means of transport, including Yachts
excluding aircrafts and vessels, upto a period of 1 month, the place
of supply is the location of the supplier of services
Example: X a Russian resident used his international debit card to
withdraw money from ATM of a bank in Vrindavan (UP) while his visit
to India. The place of supply will be Vrindavan,
A registered travel agent in New Delhi arranges a tour for a visitor from
UK for visiting various tourist places in India. The place of supply will
be the place of travel agent i.e., New Delhi.
5. Transportation services [section 13(9), 13(10) and 13(11)]
Transportation of goods , other than by way of mail or courier then place
of supply is destination of such goods.
Passenger transportation services – place where the passenger embarks
on the conveyance for a continuous journey
Services provided on board conveyance during passenger transportation
– first scheduled point of departure of that conveyance for the journey.
Online information and database access or retrieval services
(OIDAR)[section 13(12)]
The place of supply of OIDAR is the location of the recipient of
services.
It is difficult to determine the location of the recipient in case of
OIDAR. Seven conditions are laid down if any two conditions out
of seven are satisfied then, the service recipient is deemed to be
located in the taxable territory i.e., India.
a) The recipient given an Indian address through internet
b) The payment is settled by an Indian credit/debit/other card.
c) The recipient has an Indian Billing Address
d) Computer has an Indian IP address
e) Country code of the subscriber identity module card used by the
recipient of service is of India;
f) the recipient receives the service through an Indian fixed landline.
7. Notified services [section 13(13)]
1. The following specified research and development services related
to pharmaceutical services sector supplied by a person located in
taxable territory to a person located in the non-taxable territory,
place of supply shall be location of the recipient.
2. The following specified services of B2B maintenance, repair and
overhaul services of aircrafts or aircraft engines/components/parts
place of supply of services shall be the location of the recipient of
service.
Problems on place of supply
1. X of Delhi installed a weigh bridge at the site of recipient in Karnataka.
2. A businessman sold his old car lying in his home town Agra to his business
partner at Agra. There is no movement of car.
3. An elevator is installed by M of Delhi in Chennai
4. Goods are imported by Suman of Jaipur from USA
5. A Restaurant provides catering service at the premise of customer in Nagpur,
the caterer is from Hyderabad.
6.Z conducts training of employees of C Ltd. Which is a registered company in
Rajasthan. The training was conducted at Kolkata.
7. An unregistered firm sent it employees to Delhi for 3 days training. The
trainers prevail from Mumbai
8. A boarded a Train from Kota. The tickets were booked in Delhi.
9. Mr.X of Telangana does not have a bank account and takes a Demand Draft in
kerala from ABC Bank
 10. A shipping company in Vizag charges freight from a customer in
Uttar Pradesh for exporting goods to China.
11. An Architect designs a house in Agra. He belongs to London.
12. A Bengaluru based company repairs the software related computer
problem for its client in Kolkata online by sitting in Bengaluru itself.
13. A CA in Rohtak provides services to his client in Delhi.
14. Z provides interior decoration to the house of Mr.Y in Surat. Mr. Y
lives in Delhi, while Z lives in Ahmedabad.
15. Samarth a Lawyer provides services to his client in Jaipur. For the
purpose he travels to Jaipur and stays in a hotel there. The lawyer is
registered in Delhi.
Time of supply
The time of supply means the point in time when a supply shall be
deemed to have been provided.
This determines the time of supply fixes the point in time when the
liability to pay tax arises.
The CGST Act provides seperate provisions for the supply o goods
( vide section 12) and supply of services ( vide section 13)
Time limit for issue of Invoice for supply of goods
1) The invoice needs to be issued either before or at the time of
removal (where supply involves movement of goods) of
goods/delivery of goods/ making goods available to the
recipient.
2) In case of continuous supply of goods, the invoice should be
issued before or at the time of issuance of periodical
statement/receipt of periodical payment [section 31(4)]
3) In case of goods sent or taken on approval for sale or return,
invoice should be issued before or at the time of supply or 6
months from the date of removal, which ever is earlier.
Time limit for issue of invoice for supply of services
1)Tax invoice needs to issued either before the provision of service or
within 30 days from the date of supply of service. This limit is 45 days
in case of insurance companies/banking companies/financial
institutions including NBFCs
2)In case of stopping of supply of services before completion of supply,
the invoice should be issued at the time when the supply ceases
3)In case of continuous supply of services, the invoice should be issued
either
i) On/before the due date of payment or
ii)Before/ at the time when the supplier of service receives the payment
iii)On/before the date of completion of the milestone even when the
payment is linked to completion of an event.
4) The invoice may be issued before or at the time of recording of
supply in the books of account or before the expiry of the quarter
during which the supply was made, in case of following:
Insurance companies, banking companies, financial institutions, telecom
companies and notified supplier of services.
Time of Supply, supply of goods
Supplier is liable to pay tax under forward charge, the time of supply of
goods shall be the earlier of the following dates namely:-
a) The date of issue of invoice by the supplier or last date on which he is
required, under section 31, to issue the invoice with respect to the
supply. OR
b) The date on which the supplier receives the payment with respect to
the supply
All tax payers (except composition suppliers) are exempted from
paying GST at the time of receipt of advance in relation to supply of
goods under forward charge. This relief is applicable only to supply
of goods and not for services.
Ex:-1) Mr. X the supplier, received order on 12 th December, 2020 for
supply of machinery to Mr.Y . Mr. Y paid total due amount as
advance along with the order. The machinery was delivered on 18 th
January, 2021. what will be time of supply is the invoice has been
issued on:
i) 17th January, 2021
ii) 25th January, 2021.
Consider the following independent cases of supply where supply
involves movement of goods
CASE Date of Date of Date when Date of receipt of
removal issue of goods made payment by the
of goods invoice by available to supplier
the supplier the recipient
1 15-1-2021 18-1-2021 20-1-2021 28-1-2021
2 17-1-2021 16-1-2021 19-1-2021 2-2-2021
3 25-1-2021 25-1-2021 28-1-2021 2-1-2021

Determine the time of supply in accordance with the provisions of

the section.
3) Determine the Time of supply in each of the following
independent cases in case where supply does not involve
movement of goods.
Case date of issue of invoice date when goods date of receipt
by the supplier made available to of payment by
the recipient the supplier
1 2-1-2021 4-1-2021 1-1-2021
2 3-1-2021 5-1-2021 19-1-2021
3 4-1-2021 2-1-2021 10-1-2021
Determine the time of supply in the following cases if goods
were supplied on approval basis.
case date of removal date when goods are Date of receipt of
of goods accepted by the payment by the
recipient supplier
1 11-2-2021 14-2-2021 25-2-2021
2 4-1-2021 11-8-2021 12-8-2021
Time of supply for receipt that is taxable under Reverse Charge [Section
12(3)]
The time of supply is earliest of the following dates
a) The date of the receipt of the goods or
b) The date of payment as entered in the books of account of the recipient or
the date on which the payment is debited in his bank account, which ever is
earlier
c) The date immediately following 30 days from the date of issue of invoice or
any other document, by whatever name called, in lieu thereof by the
supplier
If the above conditions doesn’t work then time of supply shall be the date of
entry in the books of accounts of the recipient of supply.
Example : Ritu traders supplied to Mr.B certain goods which are liable to
be paid on reverse charge basis. The following details are available.

Transaction / event Date

1) Date of receipt of goods by Mr. B 12-1-2021
2) Date on which the payment is made by Mr. B 18-2-2021
3) Date on which above payment in entered in 20-2-2021
books by Mr. B
4) Date on which above payment is debited in bank 21-2-2021
account of Mr.B
5) Date of issue of invoice by supplier (Ritu 10-1-2021
traders)
Determine the time of supply in each of the following independent, in
accordance with section 12(3) of CGST, 2017. The recipient of goods is
liable to pay GST under Reverse Charge Basis in all the cases.
Case Date of issue of Date of receipt Date of payment Date when
invoice by the of goods by the in the books of payment is
supplier recipient recipient debited in
Bank
Account of
Recipient
1 5-1-2021 11-1-2021 16-1-2021 17-1-2021
2 6-1-2021 10-1-2021 9-1-2021 12-1-2021
3 7-1-2021 18-1-2021 16-1-2021 15-1-2021
4 8-1-2021 11-2-2021 13-2-2021 20-2-2021
Time of supply of services [section 13]
The time of supply shall be the earliest of the following dates,
a) If the invoice is issued with in the period prescribed under section 31 the
time of supply is the date of issue of invoice by the supplier
OR
the date of receipt of payment which ever is earlier
b) If the invoice is not issued with in the period prescribed under section 31
then the time of supply is the date of provision of service or the date of
receipt of payment which ever is earlier
c) If above clauses do not apply then time of supply is date on which the
recipient shows the receipt of services in books of account.
Example : Jindal consultancy services provides the following
details
Case 1 Case 2
Date of supply of service 19-1-2018 16-12-2017
Date of issue of invoice 29-1-2018 28-1-2018
Date of entering the payment in the books of 6-2-2018 29-1-2018
supplier
Date of credit of payment in bank account 5-2-2018 1-2-2018

Determine the time of supply of services in both the cases.

 When advance is received or invoice is issued for part payment
The supply shall be deemed to have been made to the extent it is
covered by the invoice or as the case may be the payment
Example:
On 12th January, 2018 B.R. Ambedkar College of Delhi University
has booked Shah Auditorium for their Annual Day Function. The
function is to held on the foundation day of the college that is on 8 th
Feburary. The college has paid booking amount Rs.20,000 on the
date of booking. The function was successfully held. The invoice
was raised by the manager of the Auditorium on 10 th Feburary for
Rs.50,000 indicating balance of Rs.30,000 payable. The balance
amount was paid by College on 16th February, 2018.
Time of supply for receipt of services that is taxable under Reverse
Charge [section 13(3)]
The time of supply shall be the earliest of the following dates
a) The date of payment as entered in the books of account of the
recipient or date on which the payment is debited in his bank account,
whichever is earlier, or
b) The date immediately following 60 days from the date of issue of
invoice or an other document, by whatever name called, in lieu
thereof by the supplier
Bharat a registered person has received the supply of service from non-taxable
territory. Determine time of supply of reverse charge
1) Date of payment as entered in the books by service receiver – 2-12-2021
2) Date on which above payment is debited in bank account - 5-12-2021
3) Date of issue of invoice by supplier of service - 24-11-2021

Import of services between Associated Enterprises

In the case of service received from an associated enterprise located outside

India, the time of supply will be the date of payment for the service,
or the date of entry of the service in the books of account of the recipient,
which ever is earlier.
Varad ltd Delhi holds 51% of shares of Anderson PLC, a UK based
Company. Anderson PLC provides business auxiliary services to
Varad Ltd. Consider the following in respect of the said supply

a) Date on which services are provided by Anderson PLC 5-1-

2021
b) Date on which invoice is issued by Anderson PLC 15-1-
2021
c) Date of debit in the books of account of Varad Ltd. 28-1-
2021
d) Date on which payment is made by Varad Ltd. 4-2-
2021
Determine the time of supply
Time of supply for supply of vouchers
a) If the supply is identifiable at the point at which voucher is
issued then the time of supply is the date of issuance of
voucher
b) If the supply is not identifiable at the point which voucher is
issued then the time of supply is date of redemption of
voucher.
Time of supply where there is change in rate of tax in respect of supply of
goods or services [section 14]
1) The timing of the two out of three factors( namely supply, invoice and
payment determines the time of supply
2) If any two parameters occur before the change in rate of tax the time of
supply will fall in the period prior to change the rate of tax and old rate
will be applicable.
3) If any of the two occur after the change in the rate of tax, the Time of
supply will fall in the period after the change in rate of tax and new rate
will be applicable.
Determine the time of supply of service in the following cases assuming
that rate of GST changes from 28% to 18% with effect from June 1
Sno Date of supply of Date of issue of Date of receipt
goods and services invoice of payment
1 May 28 June 9 July 25
2 May 28 May 28 July 25
3 May 28 June 9 May 26
4 June 10 May 28 June 25
5 June 10 May 28 May 16
6 June 10 June 9 May 28