Place of Supply – CA Final IDT Study Material

Place of Supply – CA Final IDT Study Material is designed strictly as per the latest syllabus and exam pattern.

Place of Supply – CA Final IDT Study Material

Question 1.
Asha Enterprises, supplier of sewing machines, is located in Kota (Rajasthan) and registered for purpose of GST in the said State. It receives an order from Deep Traders, located in Jalandhar (Punjab) and registered for the purpose of GST in the said State. The order is for the supply of 100 sewing machines with an instruction to ship the sewing machines to Jyoti Sons, located in Patiala (Punjab) and registered in the said State for purpose of GST. Jyoti Sons is a customer of Deep Traders. Sewing machines are being shipped in a lorry by Asha Enterprises.
Briefly explain the following:
(a) the place of supply under IGST Act, 2017;
(b) the nature of supply:- whether inter-Slate or intra-State and
(c) Whether CGST/SGST or IGST as would be applicable in this case. [May 2019, Old, 4 Marks]
Answer:
Statutory Provisions for Place of Supply in Case of Movement of Goods

Section (IGST Act)	NATURE OF SUPPLY	PLACE OF SUPPLY
10(1)(a)	Where the supply involves the movement of goods, whether by the supplier or the recipient or by any other person	Location of the goods at the time at which, the movement of goods terminates for delivery too the recipient.
10(1)(b)	Where the goods are delivered to the recipient, or any person on the direction of the third person by way of transfer of title or otherwise, it shall be deemed that the third person has received the goods.	The principal place of business of such third person.

In the given case:

(i) The place of supply

• In case of such supply, it is deemed that the said third person has received the goods and the place of supply of such goods is the principal place of business of such person [Section 10(1)(b) of the IGST Act, 2017].
• Thus, the place of supply between Asha Enterprises (Rajasthan) and Deep Traders (Punjab) will be Jalandhar, Punjab.

(ii) The nature of supply

For first Supply: Since the location of supplier (Rajasthan) and the place of supply (Punjab) are in two different States, the supply is an Inter-State supply in terms of section 7 of the IGST Act, 2017.

For Second Supply: This situation involves another supply between Deep Traders (Jalandhar, Punjab) and Jyoti Sons (Patiala, Punjab). In this case, since the supply involves movement of goods, place of supply will be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient, i.e. Patlala, Punjab [Section 10(1)(a) of the IGST Act, 2017].

(iii) CGST/SGST or IGST

For first Supply: IGST as it is an inter-State supply.
For Second Supply: Liable to CGST and SGST as it is an intra-State supply.

Question 2.
Raman Row, a registered supplier under GST in Mumbai, is directed by Nero Enterprises, Kolkata to deliver goods valued at ₹ 12,00,000 to Fabricana of Aurangabad in Maharashtra. Raman Row makes out an invoice at 9% tax rate under CGST and SGST respectively (scheduled rate) and delivers it locally in Maharashtra. Discuss and comment on the above levy of tax and determine the tax liability of goods in the above circumstances.
[May 2018 Old, 4 Marks]
Statutory Provisions: Please refer Q. 1

Supply between	Raman Row (Mumbai) & Nero Enterprises (Kolkata)	Nero Enterprises (Kolkata) & Fabricana (Aurangabad).
(i) Place of supply	Kolkata	The location of the goods at the time when the movement of goods termi­nates for delivery to the recipient i.e., Aurangabad
(ii) Nature	Inter-State supply liable to IGST	Inter-State supply liable to IGST
(iii) GST	Raman Row should charge 18% IGST on ₹ 12,00,000 i.e. × 2,16,000	18% IGST

Question 3.
Parth of Pune, Maharashtra enters into an agreement to sell goods to Bakul of Bareilly, Uttar Pradesh. While the goods were being packed in Pune godown of Parth, Bakul got an order from Shreyas of Shimoga, Karnataka for the said goods. Bakul agreed to supply the said goods to Shreyas and asked Parth to deliver the goods to Shreyas at Shimoga.
You are required to determine the place of both supplies in the above situation. [RTP, Nov. 2018/Nov. 19]
Answer:
Statutory Provisions: Please refer Q. 1

Supply between	Parth (Pune) & Bakul (Bareilly)	Bakul (Bareilly) & Shreyas (Shimoga, Karnataka)
Place of supply	It is deemed that the Bakul has received the goods and the place of supply of such goods is the principal place of business of Bakul. Accordingly, the place of supply will be Bareilly, Uttar Pradesh.	The place of supply is the location of the goods at the time when the move­ment of goods terminates for delivery to the recipient (Shreyas) i.e., Shimoga, Karnataka.

Question 4.
Mr. Z, a supplier registered in Hyderabad (Telangana), procures goods from China and directly supplies the same to a customer in US. With reference to the provisions of GST law, examine whether the said activity of supply of goods by Mr. Z to customer in US is taxable under GST. If yes, determine the place of supply of the same. [RTP, Nov. 2019]
Answer:
(a) Statutory Provision:

Schedule III to the CGST Act specifies transactions/activities which shall be neither treated as supply of goods nor supply of services.

A new activity has been added in the said Schedule III vide the CGST (Amendment) Act, 2018 namely, supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

(b) In given case:

• The goods procured from China were directly supplied to a customer in US.
• In view of the abovementioned provisions, the said activity is not a supply.
• Hence, it is not leviable to GST since “supply” is the taxable event for chargeability of GST.
• Thus, the question of place of supple does not arise in the given ease.

Question 5.
The place of supply in relation to immovable property is the location of immovable properly. Suppose a road is constructed from Delhi to Mumbai covering multiple states What will be the place of supply of construction services? [Nov. 2019, 5 Marks]
Answer:
As per Section 12(3) of IGST Act, 2017 :- Where the immovable property is located in more than one State, the supply of service is treated as made in each of the States in proportion to the value for services separately collected or determined, in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other reasonable basis as may be prescribed in this behalf.

In the absence of a contract or agreement between the supplier and recipient of services in this regard, the proportionate value of services supplied in different States/Union territories (where the immovable property is located) is computed on the basis of the area of the immovable property lying in each State/Union territories [Rule 4 of the IGST Rules],

Examiner’S Comment
In case I, some examinees were not aware that the place of supply of services directly in relation to an immovable property located outside India, where service provider and service recipient are located in India is the location of recipient in terms of section 12(3) of the IGST Act, 2017. Resultantly, they wrong answered the place of supply to be the location of immovable property.

Question 6.
Mr. Murthy, an unregistered person and a resident of Pune, hires the services of M/s. Sun Ltd. and event management company registered in Delhi, for organising of the new product launch in Bengaluru.
(i) Determine the place of supply of services provided by M/s. Sun Ltd.
(ii) What would your answer be in case the product launch takes place in Bangkok?
(iii) What would your answer be in case Mr. Murthy is a registered person and product launches take place in Bengaluru and Bangkok? [May 2018, 5 Marks]
Answer:
As per Section 12(7) of IGST Act, 2017 which provides for determination of the place of supply of services provided by way of assigning of sponsorship, when both recipient and supplier are in India. The place of supply will be as follows:

	Place of supply
(i) If recipient of service is an unregistered person and event is held in India	Place where event is actually held i.e., Bengaluru
(ii) If recipient of service is an unregistered person and event is held outside India	location of the recipient, i.e. Pune
(iii) If recipient of service is a registered person	location of such person i.e. Pune (in both the case viz. whether product launch takes in Bengaluru and Bangkok).

Question 7.
Determine the place of supply for the following independent cases under the IGST Act, 2017:
(i) Grand Gala Events, an event management company at Kolkata, organises two award functions for Kalyan Jewellers of Chennai (Registered in Chennai) at New Delhi and at Singapore,
(ii) Perfect Planners (Bengaluru) is hired by Dr. Kelvin (unregistered person based in Kochi) to plan and organise his son’s wedding at Mumbai.
Will your answer be different if the wedding is to take place at Malaysia? [May 2018, Nov. 18 Old, 2^1/2 × 2 = 5 Marks]
Answer:
Statutory Provision

1. As per section 12(7)(a)(i) of IGST Act, 2017:- When service by way of organiza­tion of an event is provided to a registered person, place of supply is the location of recipient.
2. As per section 12(7)(a)(ii) of IGST Act, 2017:- When service by way of organization of an event 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 recipient.

Place of supply

1. Since, in the given case, the award functions at New Delhi and Singapore are organized for Kalyan Jewellers (registered in Chen­nai), place of supply in both the cases is the location of Kalyan Jewellers i.e., Chennai.
2. Since, in the given case, the service recipient [Dr. Kelvin] is unregistered and event is held in India, place of supply is the location where the event is actually held i.e., Mumbai.

However, if the wedding is to take place outside India [Malaysia], the place of supply is the location of recipient, i.e. Kochi.

Examiner’S Comment
In sub-part (ii), some examinees were not aware that the place of supply of services by way of organization of an event provided to an unregistered person 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 in terms of section 12(7)(a)(ii) of IGST Act, 2017.

Resultantly, where questions requires for the place of supply if the wedding is to take place at Malaysia, they wrongly mentioned the place of supply to be Malaysia instead of Kochi.

Question 8.
Damani Industries has recruited Super Events Pvt. Ltd., an event management company of Gujarat, for organising the grand party for the launch of its new product at Bangalore. Damani Industries is registered in Mumbai. Determine the place of supply of the services provided by Super Events Pvt. Ltd. to Damani Industries.
Will your answer be different if the product launch party is organised at Dubai? [RTP, Nov. 2018]
Answer:
Solution.
Section 12(7)(a)(i) of IGSTAct, 2017 when service by way of organization of an event is provided to a registered person, place of supply is the location of recipient. Since, in the given case, the product launch party at Bangalore is organized for Damani Industries (registered in Mumbai), place of supply is the location of Damani Industries i.e., Mumbai.

In case the product launch party is organised at Dubai, the answer will remain the same, i.e. the place of supply is the location of Damani Industries – Mumbai.

Question 9.
The ADINA GROUP being an event organizer located at New Delhi organized MISS INDIA 2018 beauty pageant in India in the following cities for M/s. PCC MISS INDIA, who is an unregistered person, on 1st July, 2018:

City	New Delhi	Chennai	Kolkata	Total
No. of days	15	20	25	60
Fee in ₹	15 Crores	20 Crores	25 Crores	60 Crores

Required:
(A) Find the place of supply of service if contract specifies clear details.
(B) Find the place of supply of service it contract specifies lump sum amount of 50 Crores.
Answer:
(A) The place of supply of service if contract specifies clear details:

‘ City	No. of days	₹ In crore	Location of supplier of service	Place of supply of service (where the respective event is held)	Nature of GST
New Delhi	15	15	New Delhi	New Delhi	CGST& SGST/UTGST
Chennai	20	20	New Delhi	Chennai	IGST
Kolkata	25	25	New Delhi	Kolkata	IGST
Total	60	60

(B) The place of supply of service if contract specifies lump sum amount of 50 crores.

City	No. of days	₹ In crore	Location of supplier of service	Place of supply of service = where the respective event is held	GST
New Delhi	15	12.50	New Delhi	New Delhi	CGST & SGST/UTGST
Chennai	20	16.67	New Delhi	Chennai	IGST
Kolkata	25	20.83	New Delhi	Kolkata	IGST
Total	60	50.00

Question 10.
Musicera Pvt. Ltd., owned by Nitish Daani – a famous classical singer- wishes to organise a ‘Nitish Daani Music Concert’ in Gurugram (Haryana). Musicera Pvt. Ltd. (registered in Ludhiana, Punjab) enters into a contract with an event management company, Supriya (P) Ltd. (registered in Delhi) for organising the said music concert at an agreed consideration of ₹ 10,00,000.

Supriya (P) Ltd. books the lawns of Hotel Dumdum, Gurugram (registered in Haryana) for holding the music concert, for a lump sum consideration of ₹ 4,00,000. Musicera Pvt. Ltd. fixes the entry fee to the music concert at ₹ 5,000. 400 tickets for ‘Nitish Daani Music Concert’ are sold.
You are required to determine the CGST and SGST or IGST liability, as the case may be, in respect of the supplies involved in the given scenario.

Will your answer be different if the price per ticket is fixed at ₹ 450?
Note: Rate of CGST and SGST is 9% each and IGST is 18%. AU the amounts given above are exclusive of taxes, wherever applicable. [RTP May 2019]
Answer:
In the given situation, three supplies are involved:

	Statutory Provision	Place of supply
Services provided by Musicera Pvt. Ltd. to audi­ences by way of admission to music con­cert.	As per the provisions of section 12(6) of the IGST Act, 2017:- The place of supply of ser­vices provided by way of admission to, inter alia, a cultural event shall be the place where the event is actually held.	♦ The place of supply will be Gurugram, Haryana ♦ Since the location of the supplier (Ludhiana, Punjab) and the place of supply (Gurugram, Haryana) are in different States, IGST will be leviable. ♦ IGST @ 18% on value of supply = [4000 ticket × 5000 per ticket × 1896] = 3,60,000
Services provided by Supriya (P) Ltd. to Mu­sicera Pvt. Ltd. by way of organising the music concert.	Section 12(7)(a)(i) of IGST Act, 2017:- The place of supply of ser­vices provided by way of organization of, inter alia, a cultural event to a regis­tered person is the location of such person.	♦ The place of supply of services is the location of the recipient, i.e. Ludhiana (Punjab). ♦ Since the location of the supplier (Delhi) and the place of supply (Ludhiana, Punjab) are in different States, IGST will be leviable. ♦ IGST @ 18% on value of supply = ₹ 10,00,000 × 18% = ₹ 1,80,000
Services pro­vided by Ho­tel Dumdum to Supriya (P) Ltd. by way of accommo­dation in the Hotel lawns for organis­ing the music concert.	As per the provisions of section 12(3)(c) of the IGST Act, 2017:- The place of supply of services, by way of accom­modation in any immovable property for organizing, inter alia, any cultural func­tion shall be the location at which the immovable property is located.	♦  The place of supply of services shall be the location of the Hotel Dumdum, i.e. Gurugram, Haryana. ♦ The location of the supplier (Gurugram, Haryana) and the place of supply (Gurugram, Haryana) are in the same State, CGST and SGST will be leviable. ♦ Consideration for supply = ₹ 4,00,000 ♦ CGST @ 996 = ₹ 4,00,000 × 996 = ₹ 36,000 ♦ SGST@ 996= ₹ 4,00,000 × 996 = ₹ 36,000

As per Notification No. 9/2017 if the consideration for right to admission to the event is not more than ₹ 500 per person, then it will be exempt from GST. It means If the price for the entry ticket is fixed at ₹ 450, answer will change in respect of supply of service provided by way of admission to music concert, as mentioned in point (i) above. There will be no IGST liability. However, there will be no change in the answer in respect of supplies mentioned in points (ii) and (iii) above.

Question 11.
The All India Scientists Association (AISA) registered in Goa, contracted with event managers M/s. BA Ltd. of Kochi for organising the National seminar of scientists at Gurugram and the highly esteemed real estate company XYZ Ltd. of Delhi offered sponsorship for the seminar. Mr. A, a scientist from Chennai paid for the fees to attend the seminar at the Goa office of the AISA. Determine the place of supply of the various services supplied herein.
Answer:
The place of supply shall be determined as follows:

Service supplied	Supplier	Recipient	Place of supply	Reason
Organisa­tion of the event	BA Ltd. of Kochi	AISA of Goa	Goa	As per Section 12(7), where services are supplied by way of organisation of an event to a registered person, the place of supply shall be the location of such person.
Assigning of sponsor­ship	AISA Goa	XYZ Ltd. Delhi	Delhi	As per Section 12(7), where the any ancil­lary services are supplied to a registered person for assigning sponsorship to such events, the place of supply shall be the location of such person.
Admission to the event	AISA Goa	Mr. A of Chennai	Gurugram	As per Section 12(6), in case of services provided by way of admission to an event, the place of supply shall be the place where the event is actually held.

Question 12.
Mr. Q has availed land-line services from MTNL registered in Delhi. The telephone is installed in residential premises in Mumbai and the billing address is of office of Mr. Q in Delhi.
2. Mr. Q has availed post-paid mobile services from MTNL registered in Delhi. Mr. Q is registered under GST law in Delhi but the billing address is of residential premises of Mr. Q in Mumbai.
3. Mr. Q has purchased pre-paid mobile vouchers of MTNL registered in Delhi through internet banking. Mr. Q is registered under GST law in Delhi but in MTNL’s records the address of Mr. Q is that of his residence in Mumbai.
Answer:
Statutory Provision

(i) As per Section 12(1 l)(a), the place of supply of tele­communication services by way of fixed telecommu­nication line shall be the location where the telecom­munication line is installed for receipt of services.

(ii) As per Section 12( 11) (b), the place of supply of services by way of mobile connection for telecommunication provided on post-paid basis shall be the location of billing address of the recipient of services on the record of the supplier of services.

(iii) As per Section 12( 11 )(c), the place of supply of services by way of mobile connection for telecommunication provided on pre-paid basis shall be the location of billing address of the recipient of services on the record of the supplier of services if such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment.

Place of supply

(i) Although the billing address is in Delhi but the place of supply services shall be Mumbai i.e. the place where the telephone line is installed.

(ii) Since the billing address of the recipient is in Mumbai, the place of supply shall be in Mumbai.

(iii) Since address of Mr. Q as per MTNL’s record is that of Mum­bai, the place of supply shall be Mumbai.

Question 13.
‘PQ’, a statutory body, deals with all the advertisement and publicity of the Government. It has issued a release order to ‘Moon Plus’ channel (registered in State ‘A’) for telecasting an advertisement relating to one of the schemes of the Government in the month of September 20XX. The advertisement will be telecasted in the States of ‘A’, ‘B’, ‘C’, ‘D’ and ‘E’. The total value of the service contract entered into between ‘Moon Plus’ and ‘PQ’ is ₹ 10,00,000 (exclusive of GST).

You are required to determine the place of supply of the services in the instant case as also the value of supply attributable to the States of ‘A’, ‘B’, ‘C’, ‘D’ and ‘E’.
Further, compute the GST liability [CGST & SGST or IGST, as the case may be] of ‘Moon Plus’ as also advise it as to whether it should issue one invoice for the entire contract value or separate State-wise invoices.
The other relevant information is given hereunder:
Table 1

States	Viewership figures of ‘Moon Plus’ channel in the last week of June 20XX as provided by the Broadcast Audience Research Council
A	50,000
B + C	1,00,000
D + E	50,000

Table 2

States	Population as per latest census (in crores)
A	50
B	180
C	20
D	100
E	25

The application rate of tax is as under:

CGST	SGST	IGST
9%	9%	18%

Answer:
Statutory Provisions:

(a) As per section 12(14) of the IGST Act, 2017, the place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement is taken as being in each of such States or Union territories (where the advertisement is broadcasted/ run/played/disseminated).

(b) Where agreement exists: The value of the supply of such advertisement services specific to each State/Union territory is in proportion to the amount attributable to the services provided by way of dissemination in the respective States/Union territories determined in terms of the contract or agreement entered into in this regard.

Where agreement does not exist: In the absence of such a contract or agreement between the supplier and recipient of services, the proportionate value of advertisement services attributable to different States/Union territories (where the advertisement is broadcasted/ run/played/disseminated) is computed in accordance with rule 3 of the IGST Rules, 2017.

(c) As per rule 3(f) of the IGST Rules, 2017, in the case of advertisement on television channels, the amount attributable to the value of advertisement service disseminated in a State shall be calculated on the basis of the viewership of such channel in such State, which in turn, shall be calculated in the following manner, namely: –

Number of viewers of such channel in each State/union Territory.

Viewership can be ascertained from the channel viewership figures published by the Broadcast Audience Research Council. Figures for the last week of a given quarter will be used for calculating viewership for the succeeding quarter.

Where the channel viewership figures relate to a region comprising of more than one State/Union territory, the viewership figures for a State/Union territory of that region, will be calculated in ratio of the populations of that State/Union territory, as determined in the latest Census.

Computation of Value of Supply

States	A	B + C	D + E
Viewership figures of ‘Moon Plus’ channel as provided by the Broadcast Audience Research Council in the last week of June 20XX	50,000	1,00,000	50,0000
Viewership ratio of ‘Moon Plus’ channel in the States ‘A’, (‘B’ + ‘C’) and (‘D’ + ‘E’)	50,000:1,00,000:50,000= 1:2:1
Proportionate value of advertisement services for States ‘A’, (‘B’ + ‘C’) and(‘D’ + ‘E’)	10,00,000×1/4 = ₹ 2,50,000	10,00,000×2/4 = ₹ 5,00,000	10,00,000 × 14 = ₹ 2,50,000

Computation of state-wise Value of Supply

States	Population as per latest cen­sus (in crores)	Population ratio in the States ‘B’ &‘C’ and ‘D’ & ‘E’	Proportionate value of advertisement services in the States ‘A’, ‘B’, ‘C’, ‘D’ and ‘E’
A	50		₹ 2,50,000
B	180	B:C = 180:20 = 9:1	₹ 5,00,000 × 9/10 = ₹ 4,50,000
C	20		₹ 5,00,000 × 1/10 = ₹ 50,000
D	100	D:E= 100:25 = 4:1	₹ 2,50,000 × 4/5 = ₹ 2,00,000
E	25		₹ 2,50,000 × 1/5 = ₹ 50,000

Since, there are five different places of supply in the given case, ‘Moon Plus’ channel will have to issue five separate invoices for each of the States namely, ‘A’, ‘B’, ‘C’, ‘D’ & ‘E’ indicating the value pertaining to that State.

Computation of GST liability of ‘Moon Plus’:

States	Proportionate value of advertisement services (₹)	CGST @ 9%(₹)	SGST @ 9%(₹)	IGST @ 18%(₹)
A	2,50,000	22,500	22,500
B	4,50,000			81,000
C	50,000			9,000
D	2,00,000			36,000
E	50,000			9,000

Nature of Supply:

In case of supply of services in State ‘A’, the location of supplier (State ‘A’) and the place of supply are in the same State, hence the same is an intra-State supply in terms of section 8(1) of the IGST Act, 2017 and is thus, liable to CGST and SGST.

In all the remaining cases of supply of services, the location of the supplier (State ‘A’) and the places of supply (States ‘B’, ‘C’, ‘D’ & ‘E’) are in two different States, hence the same are inter-State supplies liable to IGST [Section 7(1)(a) of the IGST Act, 2017 read with section 5(1) of that Act].

Question 14.
Determine Place of supply in case of the advertisement service provided to the Central Gov-ernment for the test and union Territories. In the absence of contract or agreement?
Answer:
In the absence of a contract or agreement between the supplier and recipient of services, the proportionate value of advertisement services attributable to different States/Union territories will be computed in accordance with rule 3 of IGST Rules, 2017. The provisions of the said rule are tabulated below:

Types of Advertisement	Factor which Determines the Proportionate value of service attributable to the Dissemination in each Slate/Union Territory
(1) Advertisements in news­papers and publications	Amount payable for publishing an advertisement in all the editions of a newspaper or publication, which are published in each State/Union territory.
(2) Advertisements through printed material like pam­phlets, leaflets, diaries, calendars, T-shirts, etc.	Amount payable for the distribution of a specific number of such material in each State/Union territory
(3) Advertisements in hoard­ings (other than those on trains)	Amount payable for the hoardings located in each State/ Union territory
(4) Advertisements on trains	Length of the railway track in each State/Union Terri­tory, for that train
(5) Advertisements on the back of utility bills of oil and gas companies, etc.	Amount payable for the advertisements on bills pertain­ing to consumers having billing addresses in each State/ Union territory.
(6) Advertisements on rail­way tickets	Number of Railway Stations in each State/Union territory
(7) Advertisements on radio stations	Amount payable to such radio station, which by virtue of its name is part of each State/Union territory
(8) Advertisement on televi­sion channels	Number of viewers of such channel in each State/union Territory. Viewership can be ascertained from the channel viewership figures published by the Broadcast Audience Research Council. Figures for the last week of a given quarter will be used for calculating viewership for the succeeding quarter. Where the channel viewership figures relate to a region comprising of more than one State/Union territory, the viewership figures for a State/Union territory of that re­gion, will be calculated in ratio of the populations of that State / Union territory, as determined in the latest Census.
(9) Advertisements in cinema halls	Amount payable to a cinema hall or screens in a multiplex in each State/Union territory.
(10) Advertisements on inter­net	In case of advertisements over internet, the advertisement service shall be deemed to have been provided all over India. Thus, the value of such service will be apportioned amongst all States and UTs, of India in the manner pre­scribed therein.
	Manner Prescribed: Number of internet subscribers in each State/Union Territory Internet subscribers can be ascertained from the internet subscriber figures published by the Telecom Regulatory Authority of India (TRAI). Figures for the last quarter of a given financial year will be used for calculating the number of internet subscribers for the succeeding financial year. Where the internet subscriber figures relate to a region comprising of more than one State/Union territory, the subscriber figures for a State/Union territory of that region shall be calculated in the ratio of the populations of that State/Union territory, as determined in the latest census.
11. Advertisements through SMS	Number of telecom subscribers in each State/Union Territory Telecom subscribers in a telecom circle can be ascer­tained from the telecom subscribers figures published by the TRAI. Figures for a given quarter will be used for calculating the subscribers for the succeeding quarter. Where such figures relate to a telecom circle comprising of more than one State/Union territory, the subscriber figures for that State/Union territory shall be calculated in the ratio of the populations of that State/Union terri­tory, as determined in the latest census.

Question 15.
R Ltd., a chips manufacturing company based in New York, intends to launch its products in India. However, the company wishes to know the taste and sensibilities of Indians before launching its products in India. For this purpose, R Ltd. has approached GE Consultants, Delhi to carry out a survey in India to enable it to make changes, if any, in its products to suit Indian taste.

The survey is to be solely based on the oral replies of the surveyees; they will not be provided any sample by R Ltd. to taste. GE Consultants will be paid in convertible foreign exchange for the assignment.

With reference to the provisions of GST law, determine the place of supply of the service. Also, explain whether the said supply will amount to export of service?
Answer:
Statutory Provision

(i) As per section 13(2) of the IGST Act, 2017, 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 the supplier of services.

(ii)
As per section 2(6) of the IGST Act, 2017, export of services means the supply of any service when,-
(a) the supplier of service is located in India;
(b) the recipient of service is located outside India;
(c) the place of supply of service is outside India;
(d) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
(e) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.

In the given case

(i)
The given case does not fall under section 13(3) to 13(13) and thus, the place of supply in this case will be determined under section 13(2).
Thus, the place of supply of services in this case is the location of recipient of services i.e., New York.

(ii) All the five conditions are fulfilled in the given case
the same will be considered as an export of service

Question 16.
Bansal Ltd., Mumbai, provides support services to foreign customers in relation to procuring goods from India. The company identifies the prospective vendor, reviews product quality and pricing and then shares the vendor details with the foreign customer.

The foreign customer then directly places purchase order on the Indian vendor for purchase of the specified goods. Bansal Ltd. charges its foreign customer cost plus 20% mark up for services provided by it.

For the month of June, 2020, the company has charged US $ 2,00,000 (exclusive of GST) to Its foreign customer. With reference to the provisions of GST law, examine whether the said supply will amount to export of service?
Answer:

Statutory Provision

(i) If the location of the supplier of services or the location of the recipient of service is outside India, the place of supply is determined in terms of section 13 of the IGST Act, 2017.

Section 2(13) of the IGST Act, 2017 defines “intermediary” to mean a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.
As per section 13(8)(h), the place of supply in case of intermediary services is the location of the supplier

(ii) As per section 2(6) of the IGST Act, 2017, export of services means the supply of any service when,-
(a) the supplier of service is located in India;
(b) the recipient of service is located outside India;
(c) the place of supply of service is outside India; (d) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
(e) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.

In the given case

(i) In this case, since Bansal Ltd. is arranging or facilitating supply of goods between the foreign customer and the Indian vendor

• the said services can be classified as intermediary services.
• i.e., the location of Bansal Ltd. which is Mumbai.

(ii) Since, in the given case, place of supply is in India, this transactions does not tantamount to export of service.

Question 17.
Mr. Mahendra Goyal, an interior decorator provides professional services to Mr. Harish Jain in relation to two of his immovable properties. Determine the place of supply in the transactions below as per provisions of GST law in the following independent situations:

Case	Location of Mr. Mahendra Goyal	Location of Mr. Harish Jain	Properties situated at
I	Delhi	Mumbai	New York (USA)
II	Delhi	New York	Paris (France)

Explain the relevant provisions of law to support your conclusions. [May 2018, 5 Marks]
Answer:
Case 1 : If location of service provider and service recipient in India then place of supply is to be determine as per Section 12

Sec. No.	NATURE OF SUPPLY	PLACE OF SUPPLY
12(3)	Immovable property re­lated-services including Architect, Interior Design­er, Estate Agent /Lodging Accommodation By way of Hotel, Guest House etc.	♦ Location at which the immovable property or boat or vessel is located or intended to be located ♦ If location outside India, then Location of recipient ♦ If Immovable property or boat or vessels located in more than one STATE ♦ Determinable in terms of the contract or agreement, then POS → Location to be in each of the state in proportion to the values for services collected or determined. ♦ Absence of arrangement or contract, then POS → On reasonable basis as may be prescribed

Conclusion – The place of supply shall be the location of the recipient of service here – Mumbai being the location of Harish Jain. POS = Mumbai

Case 2: Where Location of Supply or Location of Recipient is outside India then place of supply is to be determined as per Section 13

Sec. No.	NATURE OF SUPPLY	PLACE OF SUPPLY
13(4)	Services supplied directly in relation to an immovable property	Place where the immovable property is located or intended to be located

Conclusion – The place of supply shall be the location of the property situated here – Paris (France). POS = pans (France).