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Place of Supply of Imports and Exports

March 15th, 2019 in GST

As per GST Act, all supplies of goods or/and services imported in India shall be treated as an inter-state supply and therefore attracts Integrated Goods and Services Tax (IGST) along with the custom duty.

The RCM is applicable on the import wherein the importer is liable to pay IGST. However, there is an exception on which RCM is not applicable that is on services related to Online Information Data Access and Retrieval (OIDAR) the supplier has to register and pay taxes.

Place of Supply of Imports

The location of the importer is the place of supply of any imported goods in India. For instance, if the importer is situated in Kerala state then in such scenario the place of supply is Kerala.

Import of

Place of Supply

GST

Goods

Location of the importer

IGST

Services

Location of the recipient of such service (if unavailable then location of supplier of service)

IGST

Place of Supply for Import or Export of Goods

Normally,

Goods

Place of Supply

GST

Imported in India

Location of Importer

IGST

Exported from India

Outside Indian border

Exempted

 

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 or Export of Services

Basic Rule:

Export or Import of

Place of supply

Recipient

Services

Location of the recipient*

Any person

 

*In a case if the recipient’s location is unavailable then the place of supply is the location of the supplier.

Note that reverse charge is applicable on the import of services that means the recipient of service will be liable to pay GST.

Specific Services Import & Export

Specific Services Import and Export

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.

Place of Supply of Imports and Exports

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 there is an import of OIDAR by an unregistered supplier located outside India to a recipient then in such a case the supplier will be liable to pay GST.

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

If there is any transaction related to goods and/or service to SEZ unit then such transaction is treated as inter-state supply. Therefore, IGST is applicable to the recipient on the reverse charge basis.