Indirect Taxes: - “A Fortnightly review” by Sinewave Computer Services Private Limited
(Jan - Feb, 2020)

Content :

From the Legal Desk

(Compiled by CA Aumkar S Gadgil and Shri Surendra G Gadgil)

Ref 2020- TIOL-02-AAR-GST Sree Varalakshmi Mahaal AAR- Chennai

Question: Whether Input Tax Credit is available on materials and services used for construction of marriage hall which is leased for short term periods on which GST is payable on the rent received ?

Ruling by the AAR: NO. (Ignoring the Hon High Court of Orissa decision in case of Safari Retreats Pvt Ltd and reported by us at serial No 9)

Our View:

  1. In case of safari retreats the appellant was carrying the business activity of constructing shopping malls for the purpose of letting out the same to numerous tenants and lessees. Therefore the facts in above decision were similar and the ratio of the HC decision should have been followed by the AAR.
  2. It was not proper for the AAR to disregard judicial discipline by ignore the Ruling in case of Safari Retreats.
  3. Its time not only for one nation- one tax, but also “one interpretation” across the nation.
  4. Though the accumulated credit on immovable property can get utilised over a period of longer time which is the reason why it is difficult for revenue to allow credit in one stroke, outright denial of credit is against the VAT principals.
  5. Administratively it can be difficult to monitor if immovable properties are used only for letting out on which GST is payable, but it is time to consider allowing explicitely restricted credit for such business like in case of Motor Vehicles.

Ref :- 2019-TIOL-78-AAAR-GST AAAR KOLKATA -Siemens Ltd

Facts:- Siemens Ltd entered into a contract with the Kolkata Metro Rail Corporation Ltd (Metro Corp) in the year 2011 for design, supply, installation, testing and commissioning of power supply and distribution system etc. They received 10% of order value as mobilisation advance amounting to Rs 16.33 Crores on 24-6-2011. Till 30-6-2017 the advance adjusted against bills during 2011 till 30-6-2017 was Rs 2.53 cr and the unadjusted advance of Rs 13.80 Cr was carried forward on 1-7-2017 when the GST came into existence.

Question: Whether GST is payable on the gross amount of the invoice raised under GST regime or the net amount of invoice after adjustment of lump sum amount outstanding as on 30-06-2017? In other words, whether GST is payable on unadjusted advances of Rs 13.80 Cr as on 30-6-2017 which were carried forward on 1-7-2017?

Ruling by AAR – Yes.

GST is payable as deemed supply of WCT service on 1-7-2017 on Rs 13.80 Cr and in case of subsequent billings in GST regime, the GST is payable only on net amount billed after adjusting the advance. It held that the unadjusted advance Rs 13.80 cr on 1-7-2017 is a consideration towards supply whether termed as a deposit or otherwise.

Grounds of Appeal by Siemens Ltd.

  • No tax was leviable on the mobilisation advance under the erstwhile tax regime.
  • As per section 140 (2) the goods or services or both supplied in the GST regime though in pursuance of a contract entered prior to the appointed day shall be liable to tax under the provisions of GST. Hence the Tax would be payable as and when the supply is made and would be payable on the gross amount billed in the GST regime.
  • The nature of earnest money did not change in GST regime and it is in nature of deposit and no tax is payable as per section 2 (31) of the CGST Act 2017
  • The provisions of time of supply as per section 13 (2) of the CGST Act 20917 shall be earlier of date of invoice or consideration received only when such consideration was received in the GST era.
  • The provisions of GST law would apply prospectively and not retrospectively
  • Ruling by AAAR- Yes. GST is payable. The ruling by AAR is upheld.

  • Siemens did not pay any interest to the metro corporation on the amount received as mobilisation advance and they had no liberty to use the advance in any other venture except for the Metro Corporation. These characteristics indicate that the amount of Rs 13.80 Crores lying unadjusted is in nature of “Advance” and not a “deposit”.
  • It is only when the amount is received as “deposit” it will not attract GST under the GST Act.
  • In the transitional provisions of GST Act, no such provision has been included whereby, the advance outstanding on 1-7-2017 will be subjected to GST only when the actual supply takes place in GST regime and bills are raised against the said advance.
  • The AAAR therefore held that GST was payable on 1-7-2017 against the unadjusted advance of Rs 13.80 Cr

Ref 2019-TIOL-499-GST in case of Kalyan Jewellers India Ltd. –AAR-Chennai.

Brief Facts:

The Applicant is in the business of manufacturing and trading of Jewellery Products. As a part of sales-promotion the Applicant introduced the facility of different types of Gift Vouchers or Gift Cards known as Pre-Paid Instruments (PPI's) viz:

  • Closed System PPIs (These are issued by applicant himself to customers on receiving the face value . These can be redeemed by the Customer or holder in any outlet of KJ across the country for purchase of jewellery),
  • Semi-closed System PPIs( The applicant has an agreement with Quick Silver Solutions Pvt Ltd (approved non - bank PPIs as authorized by RBI) where the third party issues PPIs at the retail outlet of the applicant. The issuer pays the applicant upfront an amount, called the discounted value (lower than the face value) and the thirdparty issuer sells these to the general customer at Face Value. The general customer or holder of the PPIs can redeem these at the outlets of the applicants at Face Value against their jewellery purchase. The difference is an incentive for third party PPI issuers.
  • Open System PPIs through its retail outlets: These PPI's are issued by banks and are used at any merchant location for purchase of goods and services including facilitation of cash withdrawals at ATM / Point Of Sales (POSs)/ Business correspondents (BCs). This type of PPI's not applicable to the Applicant
  • third party PPI issuers and online portals to their Customers and these are generally called "Gift Vouchers/Gift Cards" in trade practice. Third Party PPI is governed by RBI whereas closed /own PPIs are not

Contentions by the Applicant in brief:

The Applicant’s view is that PPIs are actionable claims or equivalent to money and issuing of PPIs are not supply of goods or services under the CGST Act and hence it is not taxable as per section 2 (l) of the CGST Act 2017.Further, Clause-6 of the Schedule III to the CGST Act 2O17 lists actionable claims as an activity which is neither a supply of goods nor supply of services. The Applicant has stated that these types of PPIs are in general practice in market and also various retail companies handle such PPIs in India. They are not collecting any GST on such PPIs while issuing. The Applicant in support of their claim has filed copy of Reserve Bank of India's Circular dated 1ltt' October 2OI7, Distribution Agreement entered with the third party viz., M/s. Qwickcilver Solutions Pvt Ltd, Bangalore who issues PPIs [Gift Card I Gift Voucher] on behalf of the Applicant through online portal

Questions for Advance Ruling:

Q1) Whether issue of Pre-paid Instruments (PPI's) or Gift Vouchers/Cards issued by the Applicant to their Customers through their retail outlet or through third party online portal are classified as goods (PPI)-

A1) Prepaid Instruments issued by the applicant are Goods for following reasons:

  • gift voucher/gift card is 'payment instrument' under the Payment and Settlement Act, 2007 and is subject to RBI Rules and regulations.
  • The customer cannot use it to pay for any other goods, hence it is not an 'actionable claim' as defined in the Transfer of Property Act
  • PPIs squarely fall under the definition of 'voucher' as defined in s.2(118) of the CGST Act and are, therefore, 'goods' as per section 2(52) of the CGST and TNGST Act

Q2) if classified as goods, what is the time and value of supply of goods and determination of liability to pay tax for their "Pre-paid Instruments" generally called as "Gift Vouchers / Gift Cards"?

A2) time of supply is governed by s.12(4) of the Act

Q3) Whether the issue of own closed PPIs by the 'Applicant' to their customers be treated as supply of goods or supply of service

A3) It is supply of Goods.

Q4) If yes, is the time of issue of PPI's by the Applicant to their Customers is the time of supply of goods or services warranting tax liability

A4) As per provisions of section 12 (4)

Q5) If yes, what is the applicable rate of tax for such supply of goods or services?"

A5) paper gift vouchers are classifiable under CTH 4911 9990, chargeable @12%, Sl. No. 132 of Schedule II of 1/2017-CTR;

plastic gift cards/vouchers are classifiable under CTH 8523 2100 or CTH 8523 52, chargeable @18%, Sl. No. 382 of Schedule III of 1/2017-CTR

Q6) If yes, Whether the issue of PPIs by the Third party PPI Issuers subject to GST at the time of issue in their hands?

A6) Not admitted or answered by the AAR-Chennai as the third party PPI issuers referred in this case are based in Bangalore, it is outside their jurisdiction

Q7) Whether the amount received by the Applicant from Third Party PPI Issuers subject to GST?

A7) Not admitted or answered by the AAR-Chennai for reason stated above at Q6

Q8) If No, GST collection at the time of sale of goods or services on redemption of PPIs i.e., own and from Third Party will be a sufficient compliance of the provisions of the Act?

A8) Not admitted or answered by the AAR-Chennai for reason stated above at Q6

Q9) The treatment of discount (the difference between Face value and Discounted Value) in the hands of issuer of PPI in case of thirdparty PPIs? Whether the applicant will be liable to pay GST on this difference Value?

A9) Not admitted or answered by the AAR-Chennai for reason stated above at Q6


22. Ref:- 2020- 115 taxmann.com.82 (Kerala HC)
[2020] 115 taxmann.com 82 (Kerala)
HIGH COURT OF KERALA
Sutherland Mortgage Services INC.
v.
Principal Commissioner
ALEXANDER THOMAS, J.
W.P. (C). NO. 32634 OF 2019
FEBRUARY 3, 2020

The Appellant, Sutherland Mortgage Services INC filed an application for advance ruling on the question as to whether the service provided by them on behalf of their principals in USA to a recipient outside India would constitute “export of Service “ under section 2(6) of the IGST Act 2017.

The Authority for Advance Ruling rejected the application under the provisions of Sec 97 (2) on the grounds that the Authority had no jurisdiction in terms of provisions of section 97 (2) to pass order for the determination of place of supply. We have seen many orders of the Authority of Advance Ruling to this effect and one wonders what is the point then in filing the application and spending the fees. At this stage it is also not known about the remedy in this situation. Through this judgement , it is held that a writ as per Article 226 can be filed and that clause e of Section 97 (2) is broad enough to cover such situations even if place of supply is not expressly stated in Section 907 (2).

A writ application was filed before the Kerala HC under Article 226 as the CGST ACT does not provide for appellate remedy when an application for Advance Ruling is rejected at the stage of admission only in terms of section 98 (4)

During the hearing the Revenue argued that there can be no appeal against the order of Authority of Advance Ruling except against an order passed under section 98 (4) , but when asked as to whether or not in such a situation the appellant has right to file application for writ of Certiori , under Article 226 ,the Revenue had no grounds to argue.

The Hon HC ordered that though Section 97 (2) does not state “determination of place of supply” the Authority for Advance Ruling was bound to pass order in terms of clause (e) of Section 97 (2) as the clause which reads as “ determination of liability to pay tax on any goods or service or both” is expressly provided to broaden the scope. In the words of the Hon HC QuoteQuote “there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfills the definition of place of service, would also come within the ambit of the larger of issue of "determination of liability to pay tax on any goods or services or both" as envisaged in clause (e) of Sec. 97(2) of the CGST Act”Unqoute

Many a times it is seen that the Authority for Advance Ruling have rejected the application stating that the issue relating to determination of place of supply is beyond the jurisdiction of Authority for Advance Ruling. Through this judgement the Hon Kerala High Court has set to rest this question finally.

The court has also passed advisory strictures to the Authority for Advance ruling stating that quote“ This Court has no hesitation to hold that the said view taken by the Advance Ruling Authority is legally wrong and faulty and therefore the matter requires interdiction in judicial review in the instant writ proceedings. In that view of the matter, it is ordered that the abovesaid view taken by the Advance Ruling Authority is legally wrong and faulty and is liable to be quashed and accordingly declared and ordered”

“It has been in the consistent policies of the various Governments, both at the Union level and at the levels of the States concerned, that foreign investments, apart from domestic investments, are also highly needed for our economy, subject to the regulatory framework projected by laws. In cases like this, a foreign entity like the principal company in this case, would like to have precision and certainty about tax liability so that they can accordingly modulate their future outlook and it goes without saying that the executive authorities concerned including the taxation authorities will have to take the correct perspective and in accordance with the legislative policy framed as per the wisdom of the Parliament and the State Legislatures to ensure that there is certainty and precision in taxation liability, etc. so that the domestic investors as well as foreign investors, will get more incentive to continue and increase their level of activities, for the overall better development and growth of our economy”Unquote

GST : Where Petitioner, an Indian company, filed application seeking advance ruling under section 97 on question as to whether supply of services by Indian Branch to customers located outside India would be treated as 'export of service' under provisions of IGST Act in light of intra-company agreement entered into by said branch with USA based principal company, in view of fact that said question would essentially and substantially involve determination of place of supply, even though said issue relating to determination of place of supply of service is not expressly enumerated in any clause under section 97(2), said issue being crucial issue to be determined as to whether or not it fulfills definition of place of service, would also come within ambit of larger issue of 'determination of liability to pay tax on any goods or services or both' as envisaged in clause (e) of section 97(2)

Knowledgebase

(Compiled by CA Aumkar S Gadgil)

‘Place of Supply’ under GST

The term ‘place of supply’ is very significant, as far as the Goods and Services Tax Laws are concerned. GST revolves around the concept of ‘Destination based consumption tax. Therefore, for every transaction of supply of goods or services or both, it is immensely important to determine as to at which location, the consumption of goods or services has taken place. For every transaction it is necessary to determine the “Place of Supply’ and the place of supply should be in accordance with the provisions of the law.

The definition of the word ‘Place of Supply’ has been given under Section 2 (86) of the CGST Act 2017. “place of supply” means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act. Taking a further reference to Section 10,11,12 and 13 respectively of the Integrated Goods and Services Tax Act 2017, the term Place of supply can be better understood. Given the fact that GST is a destination-based consumption tax and every state, holds a legislative power to collect tax in respect of state specific transaction, there was a need to lay down certain principles in determination of ‘Place of Supply’ which would be applicable across all the states. This would bring in uniformity. The provisions of IGST Act have not been given under the state GST Laws, but only in the Integrated Goods and Services Tax Act 2017. It may be possible, in case of a specific transaction, there might be more than 1 states be involved. There may be a situation that each of the states would assume consumption of supply in its state and accordingly claim stake for the revenue.

Let us understand the determination of Place of Supply in case of supply of services.

  1. The provisions of this section shall apply to determine the place of supply of services where the location of supplier of services and the location of the recipient of services is in India.
  2. The place of supply of services, except the services specified in sub-sections (3) to (14) Section 12(3) to Section 12(14) of the IGST Act 2017, envisages specific scenarios for which the ‘Place of Supply’ has been defined as per the provisions of the act. In circumstances other than the defined circumstances under the above-mentioned sections, generic provision is applicable.
    Thus, for every supply of service, other than the services specified under Sub section 3 to Sub section 14 of the IGST Act 2017, the following would be applicable.
    Where a supply,
    • made to a registered person shall be the location of such person;
    • made to any person other than a registered person shall be,
      • the location of the recipient where the address on record exists; and
      • the location of the supplier of services in other cases.
    Eg :- Gada Electronics services, an AC installation and repairs service provider is registered person located in Mumbai Maharashtra. It provides the services to following persons. Based on the provisions of Section 12(2), the place of supply would be as follows.
    • Supply of services to a registered person M Ltd in Surat Gujarat: In such case, the services are not being covered under Section 12(3) to 12(14), and provided to a registered person, thus the ‘Place of Supply’ would be location of such person as per Section 12(2).
    • Supply of services to an unregistered person Mr Parekh, located in Pune. In such case, the address on record exists. Thus, the Place of Supply would be address on record in Pune, Maharashtra.
    • Supply of services to an unregistered person Mr Phadke, who gets his air conditioner to the shop of Gada Electronics. However, the address on record is not available. Thus, the Place of supply would be the ‘Location of supplier.
  3. The place of supply of services,–– (a) directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; or (b) by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel; or (c) by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; or (d) any services ancillary to the services referred to in clauses (a), (b) and (c), shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located: Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient. Explanation.––Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, 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 basis as may be prescribed.
    Any supply in relation to immovable property or supply made by usage of an immovable property, for such supplies, the place of supply will always be the place where the immovable property is located or intended to be located.
    Eg: Architect Madhushree of Pune has rendered design services to TZ Reality Hyderabad for their upcoming mall in Hyderabad, Telangana. Madhushree is registered in Maharashtra. In such case, since the services are rendered in respect of a proposed property in Hyderabad, the ‘Place of Supply’ is Hyderabad, Telangana.
    Eg: Taj Hotels, registered in Maharashtra, Gujarat and Goa have hired services of Mr Abhishek a civil engineering contractor, registered in Maharashtra, to render services for their upcoming hotels in Pune (Maharashtra), Surat (Gujarat) and Panjim (Goa). In such case, a single contract has been entered. Even though the contract has been entered by Taj Hotels (Maharashtra registration), still the place of supply for the three proposed sites would be respective location and accordingly, Mr Abhishek would be required to issued invoice for the three respective locations with respective place of supplies.
  4. The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are performed.
    Eg: A beautician, registered in Delhi, has got a contract for bridal make up in Bengaluru. The beautician performs the services in Bengaluru as per the terms of contract. In this case, the place of supply would be considered as the place of performance of service ie the place of supply would be Bengaluru.
    Eg: A caterer registered in Ludhiana (Punjab), agrees to provide catering services in Delhi. In such case the place of supply would be the place where services are actually performed ie Delhi.
  5. The place of supply of services in relation to training and performance appraisal to,–
    • a registered person, shall be the location of such person;
    • ) a person other than a registered person, shall be the location where the services are actually performed.
    Eg: A management training Institute registered Pune Maharashtra, has entered a contract with Indosys Ltd Chennai. The institute would be providing training to 5 Managers of Indosys Ltd. The training would be conducted at the premises of Indosys Ltd. In such case the place of supply under the following circumstances would be as under.
    • A. If the training is conducted In Pune, but the Invoice is raised in the name of the company (registered person), the Place of Supply would be Chennai.
    • B. If the training is conducted in Pune, but the Invoice is raised in the name of the Individual participating Managers (Not registered under GST), then the Place of Supply would be Pune ie the place where services are actually performed.
  6. The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the event is actually held or where the park or such other place is located.
    Eg: Excel World is an amusement park located in Mumbai. The website-based booking is also available for this park. A company, registered under GST in Gujarat, has booked 30 tickets for its employees through the web-based booking. In such case, even though the Invoice would be in the name of the registered recipient, the Place of supply would be based on the ‘Location of event’, ie the place at which the event is actually held. Thus, the Place of Supply would be the place where the amusement park is located that is the place of supply would be Mumbai.
  7. The place of supply of services provided by way of,— (a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or (b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events,
    • ) to a registered person, shall be the location of such person.
    • ) to a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.
    Eg: Delhi automobile manufacturers association, registered under GST in Delhi is hosting a ‘Auto Expo’ in Delhi. The manufacturers from across the country would be participating in the same. The association would be providing services of ‘organisation of event’. A manufacturer, registered in Mumbai Maharashtra, takes part in the event. For the purpose of services provided to him by the association, the place of supply would be Mumbai Maharashtra, ie the location of registered person.
    Eg: A manufacturer of automobile accessories having his factory in Indore wants to participate in the Auto Expo as mentioned in aforementioned example. However, he is not yet registered under GST. In such case, the place of supply for the services provided would be the ‘Place where event is actually held’.
    Explanation.––Where the event is held in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such event, the place of supply of such services shall be taken as being in each of the respective States or Union territories 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 basis as may be prescribed.
    In respect of the above explanation
    Eg: AB Events Pvt Ltd, conducts Music concerts for Mr X a musician, in Mumbai, Delhi and Kolkata. AB Events Pvt Ltd is registered in Mumbai. Mr X also the musician holds a registration in Mumbai. In such case the place of supply ,for the total contract would be considered for the three places viz Mumbai, Delhi and Kolkata, in terms of value for each of the places in proportion at which it is apportioned to each of the place.
  8. ) The place of supply of services by way of transportation of goods, including by mail or courier to, (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.
    Eg: Q Ltd, having a GST registration in Mumbai has entered into a contract with a Transport company registered in Delhi D Trans Ltd. The transport company has agreed to deliver goods from Delhi to office of Q Ltd in Mumbai. Since the services of transportation of goods are provided to a registered person, the ‘Place of Supply’ will be the location of registered person ie Mumbai.
    Eg: If Mr Aumkar, an Individual unregistered person, hands over a parcel to XM courier Mumbai, to deliver the same to Goa. In such case, the transportation of goods services are provided to a person, other than registered person, thus the place of supply would be the place where the goods are handed over for transportation. Ie the Place of Supply would be XM courier office in Mumbai.
  9. The place of supply of passenger transportation service to,
    • a registered person, shall be the location of such person;
    • a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey.
    Eg: Ms Harsha, books a ticket for journey by air. Let us examine the Place of supply under the following scenarios.
    • Ms Harsha books her air ticket from the account of her firm. The ticket is booked for Pune-Hyderabad. After 3 days she books ticket from Hyderabad to Pune, while being in Hyderabad. She gives the GST registration details of the firm. In such case, the ‘Place of Supply’ will be the registered location of the firm from which the ticket was booked.
    • Ms Harsha books air ticket from Pune-Hyderabad as a unregistered Individual from Pune to Hyderabad. The Place of Supply would be Pune as it would be the place from where she embarks on journey. After 3 days, while being in Hyderabad, she books ticket for Hyderabad to Pune. For this booking, the ‘Place of Supply’ would be Hyderabad as she would embark on the journey from Hyderabad.
    Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2). Explanation:– For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time.
  10. ) The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey.
    Eg: XZ Hospitality provides hospitality management services to Indian Railways for their premium service train “Rajdhani Express’ which plies from Mumbai-Delhi and back. While XZ staff boards the train from Mumbai, the ‘Place of Supply’ would be the first scheduled point of departure ie Mumbai. Even though the train passes through many states en-route, the ‘Place of Supply’ would be Mumbai for services provided by XZ Hospitality.
  11. The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall,
    • in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services;
      Eg:- Taat Sky, a DTH operator, has installed a Dish TV connection in the office of Mr Vihaan located in Pune Maharashtra. Vihaan also has a office in Surat Gujarat. In such case for the connection in Pune, the ‘Place of Supply” would be Pune, for the connection in Surat, the ‘Place of Supply’ would be Surat.
    • ) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the recipient of services on the record of the supplier of services;
      Eg: Mr Sanjeevan has a phone connection issued by Airbell Ltd. The connection is by way of postpaid connection. Issued in his registered address in Nashik Maharashtra. Irrespective of whichever state Mr Sanjeevan actually uses the phone services, the ‘Place of Supply’ would continue to remain Nashik.
    • in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means,–– (i) through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or (ii) by any person to the final subscriber, be the location where such prepayment is received or such vouchers are sold;
      Eg: Any service provided by way of a pre-paid model, the ‘Place of Supply’ would be the location of the distributor or sub distributor or the retailer, who ultimately sells the same to the customer/end user.
    • in other cases, be the address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services.
      Provided that where the address of the recipient as per the records of the supplier of services is not available, the place of supply shall be location of the supplier of services: Provided further that if such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on the record of the supplier of services shall be the place of supply of such services.
      Explanation.––Where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the respective States or Union territories 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 basis as may be prescribed.
  12. ) The place of supply of banking and other financial services, including stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services: Provided that if the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services.
  13. The place of supply of insurance services shall,–– (a) to a registered person, be the location of such person; (b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services.
    Eg:- Mr Nishant has taken a Fire Insurance Policy, in the name of his company N Agro Pvt Ltd, registered under GST. In such case, the ‘Place of Supply’ would be the registered address of ‘N Agro Pvt Ltd’.
    Eg:- Mr Nishant, has taken a Motor vehicle Insurance policy for his personal car. In such case, since the insurance services are provided to Individual the ‘Place of Supply’, would be address on record of Mr Nishant as per the records of the Insurance company.
  14. 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 shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be 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 basis as may be prescribed.
    As mentioned, the Place of supply as per section 12 will be used only in cases where the ‘Location of Supplier of Services’ and the “Location of recipient of Services’ is in the taxable territory. If either of the supplier or recipient is located outside India, the determination of ‘Place of Supply’ would be done in accordance of Section 13 of the IGST Act 2017.

Statutory Updates under GST Law

(Compiled by CA Aumkar S Gadgil and Shri Abhinay Soman)

Notifications

Sr No Notification No. & Date of issue Particulars
1 Notification No.01/2020 – Central Tax dt 01-01-2020 Seeks to bring into force provisions of sections 92 to 112, (except section 92, section 97, section 100 and sections 103 to 110) of the Finance (No. 2) Act, 2019 (23 of 2019), to amend the CGST Act, 2017.
2 Notification No.02/2020 – Central Tax dt 01-01-2020 Seeks to make amendment (2020) to CGST Rules.
3 Notification No.03/2020 – Central Tax dt 01-01-2020 Seeks to amend the notification No. 62/2019-CT dt. 26.11.2019 to amend the transition plan for the UTs of J&K and Ladakh
4 Notification No.04/2020 – Central Tax dt 10-01-2020 Seeks to extend the one-time amnesty scheme to file all FORM GSTR-1 from July 2017 to November, 2019 till 17th January, 2020.
5 Notification No.05/2020 – Central Tax dt 13-01-2020 Seeks to appoint following Revisional Authorities under CGST Act, 2017:
(a) the Principal Commissioner or Commissioner of Central Tax for decisions or orders passed by the Additional or Joint Commissioner of Central Tax; and
(b) the Additional or Joint Commissioner of Central Tax for decisions or orders passed by the Deputy Commissioner or Assistant Commissioner or Superintendent of Central Tax,
6 Notification No.06/2020 – Central Tax dt 03-02-2020 Seeks to extend the last date for furnishing of annual return/reconciliation statement in FORM GSTR-9/FORM GSTR-9C for the period from 01.07.2017 to 31.03.2018.
7 Notification No.07/2020 – Central Tax dt 03-02-2020 Notification issued to prescribe due dates for filing of return in FORM GSTR-3B in a staggered manner:
For the month of January, 2020, February, 2020 and March, 2020 for taxpayers having an aggregate turnover of up to rupees five Crore in the previous financial year and whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep shall be furnished electronically through the common portal, on or before the 22nd February, 2020, 22nd March, 2020, and 22nd April, 2020, respectively
For the months of months of January, 2020, February, 2020 and March, 2020 for taxpayers having an aggregate turnover of up to rupees five Crore in the previous financial year and whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam,
West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi shall be furnished electronically through the common portal, on or before the 24th February, 2020, 24th March, 2020 and 24th April, 2020, respectively.
8 Circular No.131/2019 - GST dt 23-01-2020 Standard Operating Procedure (SOP) to be followed by exporters as per attached circular
9 Notification No.01/2020 – Central Tax (Rate) dt 21-02-2020 Seeks to amend notification No. 1/2017- Central Tax (Rate) dated 28.06.2017 so as to notify rate of GST on supply of lottery as follows:
(a) In Schedule II - 6%, S. No. 242 and the entries relating thereto shall be omitted;
(b) In Schedule IV - 14%, for S. No. 228 and the entries relating thereto, the following S. No. and the entries shall be substituted, namely: -
“228:Any chapter:Lottery”.



Disclaimer: The views provided above are on the basis of our understanding of the GST Laws, Rules and Regulations. The adjudicating or Judicial Authorities may or may not agree with the views expressed above.


CA Aumkar Surendra Prachi Gadgil