Place of Supply, Goods and Services Tax - GST

[Kaustubh Karandikar]

XYZ (Maharashtra) had received the consultancy services from PQR (an advocate from Delhi). PQR is registered with GST but for this particular service PQR had not charged GST since payable by XYZ under reverse charge. XYZ while paying GST under reverse charge on the same need to pay CGST + SGST or IGST? In my view, this will fall under Section 12(2)(a) of IGST Act i.e. the place of supply of services, except the services specified in sub-sections (3) to (14), made to a registered person shall be the location of such person. Therefore, XYZ will be required to pay IGST under reverse charge. Views of the experts please.

Posts / Replies

[GUNASEKARAN K]

Yes, IGST Payable is correct.

Let say PQR files their GSTR-1 and active the RCM Flag "YES" - The IGST tax liability transfer to service recipient payable under under Reverse Charge.

If PQR is not registered then CGST & SGST should payable by XYZ in same manner.

[KASTURI SETHI]

Dear Sir,

IGST is applicable in this scenario.

[Padmanathan Kollengode]

I agree with the experts that IGST is payable and further elaborate my views as under:

A. According to section 5(1), subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person

B. According to section 7(3) subject to the provisions of section 12, supply of services, where the location of the supplier and the place of supply are in––

(a) two different States;

(b) two different Union territories; or

(c) a State and a Union territory,

shall be treated as a supply of services in the course of inter-State trade or commerce.

C. According to Section 12(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.

D. According to Section 12(2), the place of supply of services, except the services specified in sub-sections (3) to (14),––

(a) made to a registered person shall be the location of such person;

(b) made to any person other than a registered person shall be,––

(i) the location of the recipient where the address on record exists; and

(ii) the location of the supplier of services in other cases.

Therefore, the place of supply is Maharashtra.

E. Section (15) “location of the supplier of services” means,––

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier;

The supplier here PQR is registered in Delhi, hence the location of supplier is Delhi.

F. As per Section (3), the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

G. Therefore the provisions relating to location of supplier and place of supply as applicable to supplier-PQR shall apply to recipient-XYZ who is paying tax on reverse charge basis and hence, it shall be inter-state supply attracting IGST.

[Amit Agrawal]

I agree with my professional colleagues that IGST is payable under RCM by XYZ (Maharashtra) with the understanding that 'said consultancy is nothing but legal services received'. And this is irrespective of the fact that PQR (an advocate from Delhi) is registered under GST or not.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Ganeshan Kalyani]

As per Notification 13/2017 - CTR dated 28.06.2017 as updated from time to time, the responsibility to pay GST on the service specified in the said Notification is on the recipient. Hence, the recipient becomes liable to pay GST. The supplier may be registered. It will not impact the position of recipient in paying GST under RCM.