On completion of this lesson, you
will be able to understand:
·Place of
Supply in case of movement of goods
·Supply does
not involve movement of goods
·Supply of
goods assembled / installed at a site
·Goods
supplied on board a conveyance
·Settlement
System between Governments
Please go through the
Second Video of Chapter 13.
IGST Act is very small with
very few definitions and major part catering to settlement commissioner.
Provisions in CGST or SGST Act will apply to IGST Act also. Various provisions as
mentioned therein shall apply under IGST Act as they apply in relation to levy
under the CGST Act.
In this chapter we will
look upon two main points.
·Place of Supply
·Settlement System
Determination of Place of Supply
The draft, inter alia, sets
out the rules for determination of the place of supply of goods.
·Where the supply involves
movement of goods, the place of supply shall be the location of
goods at the time at which the movement of goods terminates for delivery to the
recipient.
·Where goods are delivered
by the supplier to the recipient but at the instruction of a third person – Place of supply will be
determined to be the place of supply which will be the principal place of
business of such third party and not of the actual recipient.
·Where the supply does not
involve movement of goods, the place of supply shall be the location of such
goods at the time of delivery to the recipient.
·In the case of goods
assembled or installed at site, the place of supply shall
be the place of such installation or assembly.
·Finally, where the goods
are supplied on board a conveyance, the place of supply shall
be the location at which such goods are taken on board.
Illustrations
Section 10(1) (a): Supply involves movement of goods
Particulars
Supplier's
factory from
where goods
are removed
Termination
of
movement
for delivery
Place
of
supply
Tax Payable
Movement of goods by the supplier (goods dispatched
by supplier)
[Section 10(1)(a) read with
section 2(96)(a) of CGST Act]
Orissa
Assam
Assam
IGST payable at Orissa
Orissa
Orissa
Orissa
CGST / SGST
payable at
Orissa
Movement of goods by the
recipient (goods collected by
recipient)
[Section 10(1)(a) read with
section 2(96)(b) of CGST Act]
Kerala
Goa
Goa
IGST payable
at Kerala
Kerala
Kerala
Kerala
CGST / SGST
payable at
Kerala
Section 10(1)(c): Supply does not involve movement of
goods
Particulars
Location
of
supplier
Location
of
recipient
Location
of goods
at the
time of
delivery
Place
of
supply
Tax Payable
Sale of pre-installed DG
Set
Delhi
Bhopal
Bhopal
Bhopal
IGST payable at
Delhi*
Manufacture of moulds by
job-worker (supplier),
sold to the Principal, but
retained in job worker’s
premises
Tamil
Nadu
Kerala
Tamil
Nadu
Tamil
Nadu
CGST + Tamil
Nadu GST
payable at Tamil
Nadu
*Note: Some experts are of the view that the supplier may be required to obtain
registration in Bhopal, and pay CGST + SGST at Bhopal.
Section 10(1)(d): Supply of goods assembled/ installed
at site
Particulars
Location
of
supplier
Registered
office of
recipient
Installation
/ Assembly
Site
Place of
supply
Tax Payable
Installation of
weigh bridge
Delhi
Bhopal
Bhopal
Bhopal
IGST payable
at Delhi
Servers supplied and installed at an
office
Karnataka
Goa
Karnataka
Karnataka
CGST + Karnataka
GST payable
at Karnataka
Supply of workstations
Gujarat
Gujarat
Kerala
Kerala
IGST payable
at Gujarat
Section 10(1)(e): Supply of goods supplied on board a
conveyance
Particulars
Location
of
supplier
Loading
of goods
Passenger
boards at
Place of
supply
Tax Payable
Supply of canned
aerated drinks on a
flight
Punjab
Punjab
Delhi
Punjab
CGST + Punjab
GST payable
at Punjab
Sale of packaged
snacks during the
journey
Pune
Goa
Hyderabad
Goa
IGST payable
at Pune
Sale of sun-glasses
on a ship
Bangalore
Chennai
Cochin
Chennai
IGST payable
at Bangalore
A detailed discussion on Place of supply is available
in GST Intermediate Course.
Settlement System
The relevant information is
also submitted to the Central Agency which will act as a clearing house
mechanism, verify the claims and inform the respective governments to transfer
the funds.
Seller and Exporting State
The inter-State seller will
pay IGST on value addition after adjusting available credit of IGST, CGST, and
SGST on his purchases. So the IGST liability can be set off against the Input
Tax Credit available – IGST, CGST and SGST on his purchases.
üSGST Credit is set off against the IGST
liability.
The Exporting State will
transfer to the Centre the credit of SGST used in payment of IGST. That is the
Exporting Sate Govt. has to pay an amount (equal to the SGST credit availed by
the Supplier) to the Central Government. The exporting state shall pay the
amount equal to the ITC of SGST used by the supplier in the exporting state to
the Centre.
Buyer and Importing State
The Importing dealer will
claim credit of IGST while discharging his output tax liability in his own
State.
§IGST Credit is set off against the SGST
Liability.
The Centre will transfer to
the importing State the credit of IGST used in payment of SGST. The centre
shall pay the amount equal to the ITC of IGST used by a dealer for payment of
SGST on intra- state supplies. The importing State Govt. will get an amount
(equal to the IGST Credit availed by the Buyer) from the Central Government.
The settlement would be on
cumulative basis for a state taking into account the details furnished by all
dealers in the settlement period. Similar settlement of amount would also be
undertaken between CGST and IGST account.
Place of Supply
SECTION : Overview of the IGST Act
DESCRIPTION
Lesson Objectives
On completion of this lesson, you will be able to understand:
· Place of Supply in case of movement of goods
· Supply does not involve movement of goods
· Supply of goods assembled / installed at a site
· Goods supplied on board a conveyance
· Settlement System between Governments
Please go through the Second Video of Chapter 13.
IGST Act is very small with very few definitions and major part catering to settlement commissioner. Provisions in CGST or SGST Act will apply to IGST Act also. Various provisions as mentioned therein shall apply under IGST Act as they apply in relation to levy under the CGST Act.
In this chapter we will look upon two main points.
· Place of Supply
· Settlement System
Determination of Place of Supply
The draft, inter alia, sets out the rules for determination of the place of supply of goods.
· Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient.
· Where goods are delivered by the supplier to the recipient but at the instruction of a third person – Place of supply will be determined to be the place of supply which will be the principal place of business of such third party and not of the actual recipient.
· Where the supply does not involve movement of goods, the place of supply shall be the location of such goods at the time of delivery to the recipient.
· In the case of goods assembled or installed at site, the place of supply shall be the place of such installation or assembly.
· Finally, where the goods are supplied on board a conveyance, the place of supply shall be the location at which such goods are taken on board.
Illustrations
Section 10(1) (a): Supply involves movement of goods
Particulars
Supplier's
factory from
where goods
are removed
Termination
of
movement
for delivery
Place
of
supply
Tax Payable
Movement of goods by the supplier (goods dispatched by supplier)
[Section 10(1)(a) read with
section 2(96)(a) of CGST Act]
Orissa
Assam
Assam
IGST payable at Orissa
Orissa
Orissa
Orissa
CGST / SGST
payable at
Orissa
Movement of goods by the
recipient (goods collected by
recipient)
[Section 10(1)(a) read with
section 2(96)(b) of CGST Act]
Kerala
Goa
Goa
IGST payable
at Kerala
Kerala
Kerala
Kerala
CGST / SGST
payable at
Kerala
Section 10(1)(c): Supply does not involve movement of goods
Particulars
Location
of
supplier
Location
of
recipient
Location
of goods
at the
time of
delivery
Place
of
supply
Tax Payable
Sale of pre-installed DG Set
Delhi
Bhopal
Bhopal
Bhopal
IGST payable at
Delhi*
Manufacture of moulds by
job-worker (supplier),
sold to the Principal, but
retained in job worker’s
premises
Tamil
Nadu
Kerala
Tamil
Nadu
Tamil
Nadu
CGST + Tamil
Nadu GST
payable at Tamil
Nadu
*Note: Some experts are of the view that the supplier may be required to obtain registration in Bhopal, and pay CGST + SGST at Bhopal.
Section 10(1)(d): Supply of goods assembled/ installed at site
Particulars
Location
of
supplier
Registered
office of
recipient
Installation
/ Assembly
Site
Place of
supply
Tax Payable
Installation of
weigh bridge
Delhi
Bhopal
Bhopal
Bhopal
IGST payable
at Delhi
Servers supplied and installed at an
office
Karnataka
Goa
Karnataka
Karnataka
CGST + Karnataka
GST payable
at Karnataka
Supply of workstations
Gujarat
Gujarat
Kerala
Kerala
IGST payable
at Gujarat
Section 10(1)(e): Supply of goods supplied on board a conveyance
Particulars
Location
of
supplier
Loading
of goods
Passenger
boards at
Place of
supply
Tax Payable
Supply of canned
aerated drinks on a
flight
Punjab
Punjab
Delhi
Punjab
CGST + Punjab
GST payable
at Punjab
Sale of packaged
snacks during the
journey
Pune
Goa
Hyderabad
Goa
IGST payable
at Pune
Sale of sun-glasses
on a ship
Bangalore
Chennai
Cochin
Chennai
IGST payable
at Bangalore
A detailed discussion on Place of supply is available in GST Intermediate Course.
Settlement System
The relevant information is also submitted to the Central Agency which will act as a clearing house mechanism, verify the claims and inform the respective governments to transfer the funds.
Seller and Exporting State
The inter-State seller will pay IGST on value addition after adjusting available credit of IGST, CGST, and SGST on his purchases. So the IGST liability can be set off against the Input Tax Credit available – IGST, CGST and SGST on his purchases.
ü SGST Credit is set off against the IGST liability.
The Exporting State will transfer to the Centre the credit of SGST used in payment of IGST. That is the Exporting Sate Govt. has to pay an amount (equal to the SGST credit availed by the Supplier) to the Central Government. The exporting state shall pay the amount equal to the ITC of SGST used by the supplier in the exporting state to the Centre.
Buyer and Importing State
The Importing dealer will claim credit of IGST while discharging his output tax liability in his own State.
§ IGST Credit is set off against the SGST Liability.
The Centre will transfer to the importing State the credit of IGST used in payment of SGST. The centre shall pay the amount equal to the ITC of IGST used by a dealer for payment of SGST on intra- state supplies. The importing State Govt. will get an amount (equal to the IGST Credit availed by the Buyer) from the Central Government.
The settlement would be on cumulative basis for a state taking into account the details furnished by all dealers in the settlement period. Similar settlement of amount would also be undertaken between CGST and IGST account.
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