Place of Supply of Imports and Exports

Place of Supply

Under the GST Act, imports of goods and services are generally treated as inter-State supplies and attract IGST, with customs duties also applying to imported goods where relevant. Understanding the place of supply rules for imports under GST helps determine the applicable tax treatment for cross-border transactions.

Reverse charge generally applies to imports of services, making the Indian recipient liable to pay IGST where applicable. For imports of goods and services under GST, businesses should distinguish these rules from the specific provisions governing OIDAR services supplied by overseas providers to non-taxable online recipients.

Place of Supply of Imports

For imported goods, the place of supply is generally the location of the importer. Businesses dealing with cross-border services should also review GST amendments affecting place-of-supply and OIDAR provisions to ensure that their tax treatment reflects the applicable legal changes.

Place of Supply for Import or Export of Goods

Normally, place of supply for import and place of supply in case of export of goods

Let us understand this with an example:

• In case of Import of goods

  Mr. Raj imports Data cables from Taiwan for his mobile shop registered in Delhi.

  Then in such case Delhi will be the Place of supply and IGST will levy.

• In case of Export of goods

  Mr. Krishna exports perfumes from India to US.

  Then in such case US will be the Place of supply. However, No GST will levy on such transaction.

Place of Supply of Import and Export of Services 

Basic Rule: See the place of supply for export of services.

*In a case if the recipient's location is unavailable then the place of supply in case of import of services and place of supply of services under GST for exportis the location of the supplier.

Reverse charge generally applies to imports of services, meaning the Indian recipient may be liable to pay GST under the applicable provisions. Businesses should understand the reverse charge mechanism under GST to determine their tax-payment and compliance responsibilities.

Specific Services Import & Export

See the import and export of services under GST with example:

Note:

If such services are supplied to many locations and where one of such supply is in the taxable territory then the taxable territory will be the place of supply.

• For example, if any service is rendered in both UAE and India. In such a scenario, India shall be considered a place of supply and GST will be levied accordingly.

Where such services mentioned above is supplied to different states. In such a scenario all the states where such services are supplied will be deemed as the place of supply. And the GST will be shared by the states proportionately accordingly.

For instance

• If Mr Henry from Canada visits Delhi & goes to HDFC Delhi branch

  Then in such a case, the place of supply will be Delhi, and CGST & SGST will be applicable to such service.

• The Dubai Emirates flies passengers from Delhi to Dubai via Bangalore. Mr Sanjay is touring from Delhi to Dubai.

  Then in such a case, the place of supply will be Delhi (Place where the passenger sits in the conveyance for the journey), and CGST & SGST will be applicable to such service.

Services related to Online Information Data Access and Retrieval (OIDAR)

When OIDAR services are supplied by a provider located outside India to a non-taxable online recipient in India, the overseas supplier is generally responsible for paying IGST under the applicable provisions. The place-of-supply rules for OIDAR services help clarify the tax treatment and the responsibilities of overseas providers.

To pay the GST levied, either he has to obtain the GST registration or else he may appoint an agent on his behalf.

Supply to SEZ

Supplies of goods or services to or by a Special Economic Zone unit or developer are generally treated as inter-State supplies, with the applicable GST treatment depending on the nature and direction of the transaction. Businesses should review the GST provisions for Special Economic Zones to understand zero-rating, documentation, and tax-payment requirements.