Possible Mistakes and Issues in Place of supply of Services under GST

The Indian economy is all set for financial overhaul with the execution of GST which is expected to produce a Common National Market and offer a boost to Indian exports. GST, based upon the notion ” One Nation; One Market; One Tax”, will roll-out from July 1, 2017 GST being the greatest tax reform will be a turning point for the economy and would benefit all stakeholders i.e. the Government, Businessman, and consumers. In this constantly changing situation, the Institute is proactively supporting the Government by contributing its ideas on the one hand and disseminating awareness among the members and other stakeholders on the other hand. CAknowledge.in is constantly working to develop awareness concerning GST amongst members, stakeholders and public at big. Now check more details for “ Possible Mistakes and Issues in Place of supply of Services under GST” from below …

Challenges under Place of supply of Services under GST Regime

S.12(14) of IGST Act: Advertisement

location of supply of ad services to the Central Government, a State Government, a statutory body or a regional authority indicated for the States or Union territories identified in the agreement or contract


  • 1) M/s AAA Ltd., an Advertising company were selected by MoH for dissemination of– Sarva Shiksha Abhiyan for a price of Rs.40 Crores to be put on electronic media across the nation
  • 2) M/s ABD Ltd., a Print media were approached by MoF for a project of– GST Entrollment for an unique publication in South India for a plan of Rs.10 Crore

S.12(13) of IGST Act: Insurance

  • ( a) to a signed up individual, be the area of such individual;-LRB-
  • ( b) to a person besides a signed up person, be the place of the recipient of services on the records of the supplier of services


  • 1) M/s ABC Ltd., having registered office in Chennai have sought for Insurance coverage of all 10 branches located throughout India for Rs.100 Crore. M/s. NIC Ltd., an Insurance business have actually provided a premium of Rs.4.2 Crore for whole coverage
  • 2) M/s NIC Ltd., an Insurance company has to settle an Insurance claim along with processing charges of Rs.10 lakhs to an Unit situated in Haryana on behalf of the application filed by the Head Office at Mumbai

S.12(12) of IGST Act: Banking & Other Financial Services

The location of supply of banking and other financial services, consisting of stock broking services to any person shall be the location of the recipient of services on the records of the provider of services

If the place of recipient of services is not offered, the location of supply shall be the place of the supplier of services


  • 1) M/s HLU ltd., having Corporate Office in Chennai, seeks for a Working capital loan of Rs.20 Crore [10+10] with a leading MNC Bank Ltd., each of such loan intended for its branches found in Kochi and Hyderabad. MNC Bank Ltd., approves the loan and charges processing charges of Rs.20 lakhs
  • 2) M/s XYZ Ltd., a Trading business has actually got spread out across whole South India. All the branches have just one Bank Account preserved by Regd. Office at Hyderabad. Bank Processing charges along with suitable taxes towards Bill Discounting, Cheque Dishonour and so on, how to deal with under GST

S.12( 8) of IGST Act: Transportation of Goods

  • ( a) a signed up individual, will be the location of such person;-LRB-
  • ( b) an individual other than a registered individual, will be the place at which such goods are turned over for their transport


  • 1) M/s LLP Ltd., Supplier signed up in Bengaluru, dispatches a DG Set to its client situated in Hyderabad through a Transport representative on– to pay ‖ basis to the client
  • 2) Branch1 in State1 dispatches the consignment worth Rs.20 lakhs to its Branch2 located in State2, through a Transport firm. Reservation of Transportation is done by Branch1 and Payment will be done by Branch2 on invoice of the consignment

S.12( 3) of IGST Act: Immovable Property, Accommodation, Boat, Vessel or other similar services

will be the location at which the unmovable property or boat or vessel, as the case may be, is located or planned to be situated Reference to Rules


  • 1. M/s. ABC Ltd., approaches Mr. Z an Interior Decorator for making a consistent structure & colour coding for all the Branches across India. Mr.Z proposes for Rs.10 Crore as consultation charges
  • 2. Mr.A an owner of Commercial building at Pune, participates in an agreement with M/s. BCD Ltd., at Bangalore for renting such Immovable Property

Place of Supply difficulties for Services

S.13(12) of IGST Act: Online details and database gain access to or retrieval services POS shall be the location of the recipient of services [OIDDBAR]

Person getting the Service will be deemed to be located in the taxable territory, if any 2 of the following noncontradictory conditions are pleased, namely:–

  • ( a) the location of address provided by the recipient of services through internet remains in the taxable area;-LRB-
  • ( b) the credit card or debit card or shop worth card or charge card or clever card or any other card by which the recipient of services settles payment has been provided in the taxable territory;-LRB-
  • ( c) the billing address of the recipient of services remains in the taxable territory;-LRB-
  • ( d) the internet procedure address of the gadget utilized by the recipient of services is in the taxable area;-LRB-
  • ( e) the bank of the recipient of services in which the account used for payment is kept is in the taxable territory;-LRB-
  • ( f) the country code of the subscriber identity module card utilized by the recipient of services is of taxable territory;-LRB-
  • ( g) the place of the fixed land line through which the service is gotten by the recipient is in the taxable area

S.13( 8) of IGST Act: POS on the basis of Location of Supplier of Service

  • a) Services supplied by a Banking Company, Financial Institution or a NBFC
  • b) Intermediary Services
  • c) Hiring of Transport including Yacht however leaving out airplane upto a duration of one month


  • Commission made by an Intermediary for outgoing service
  • Services performed by a Foreign branch of a Bank, on behalf of an Inbound branch

S.13( 3) of IGST Act:

POS shall be the location where Services are in fact performed

  • a) Services supplied in Respect of the products which are physically offered If services are rendered from another location, POS will be place of goods at the time of supply. Efficiency based test not applicable for products momentarily imported into India for repair work and are exported after repair without being put to any other use in India
  • b) Services supplied to an Individual, which require the physical existence of recipient with the provider for the supply of service


Services carried out by a Registered individual in relation to products exported earlier, on bringing them back to India [post warranty or out of warranty]

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