How to Determine Place Of Supply of Service Under GST

Goods and Services Tax (GST) was implemented in India on 1st July 2017. GST subsumed many indirect taxes, including Service Tax. Under the GST regime, services are taxed based on the place of supply. Understanding the place of supply of services is crucial as it determines the tax liability and compliances under the GST.

What is place of supply of services under GST?

The place of supply of services is the location where the services are deemed to be provided. The place of supply determines the taxability of the services and the compliances required under the GST.

How to determine the place of supply of services under GST?

The place of supply of services under GST is determined based on the nature of services and the location of the supplier and the recipient. The following are the different scenarios for determining the place of supply of services under GST.

Place of supply of services where the location of the supplier and the recipient is in India

If the location of the supplier and the recipient of services is in India, then the place of supply of services is determined based on the following factors:

If the services are provided to a registered person, then the place of supply is the location of the recipient as per the records of the supplier.
If the services are provided to an unregistered person, then the place of supply is the location where the services are actually performed.

Place of supply of services where the location of the supplier or the recipient is outside India

If the location of the supplier or the recipient of services is outside India, then the place of supply of services is determined based on the following factors:

If the services are provided to a registered person, then the place of supply is the location of the recipient as per the records of the supplier.
If the services are provided to an unregistered person, then the place of supply is the location where the services are actually performed.

Place of supply of specified services

There are some services that are specified in the GST law, and the place of supply of these services is determined based on specific rules. The following are the examples of specified services and their place of supply rules:

Transportation of goods – the place of supply is the location where the goods are handed over for transportation.
Restaurant and catering services – the place of supply is the location where the services are actually performed.
Training and performance appraisal – the place of supply is the location where the services are actually performed.

Conclusion

Understanding the place of supply of services is crucial under the GST regime. It determines the tax liability and compliances. Determining the place of supply of services requires you to consider various factors, such as the location of the supplier and the recipient and the nature of services. It is recommended to seek professional advice to ensure compliance with the GST law.